How Silicon Valley came to depend on China for success — and why it’s bent over backward to stay in the govt’s good graces

How Silicon Valley Became Dependent on China for Success—and Why It’s Leaning Back to Live in the Good Qualities of Government

The country has become one of Apple’s most important and lucrative markets. The tech giant has become heavily dependent on contract suppliers to assemble many of its popular gadgets as well as on consumers in the populous country. Analysts estimate that forty percent of Apple’s total sales came from China last quarter, and the country accounts for about a fifth of total iPhone sales.

But that increased dependence put Apple in a difficult position, forcing the company to choose between complying with the wishes of the Chinese government and disappearing from the growing market.

And it’s not just the phone giant: Microsoft’s LinkedIn, Facebook, Disney, Google, and others have made concessions to stay there. After all, missing out on a massive — and growing — market would potentially mean falling behind rivals.

“China is like the legend of Excalibur to the CEO of Silicon Valley, a sword in the stone,” Duncan Clark, a Beijing-based tech analyst and author of a book about Chinese tech company Alibaba, told Time in 2016.

LinkedIn removed several journalists’ accounts on its China website in September over government-banned material, such as mentions of genocide against the Uighur Muslim minority. Concerns about those human abuses have fueled the US and other countries’ diplomatic boycott of the 2022 Olympic Games in Beijing.

At the time, LinkedIn told one affected journalist, Greg Bruno, “While we strongly support freedom of expression, we recognized when we launched it that we need to comply with Chinese government requirements in order to work in China.” Will be.”

But eventually, LinkedIn abandoned and closed its Chinese site.

Next is Apple CEO Tim Cook, who was asked in November about human rights issues in China. He responded that his firm has a “responsibility” to do business everywhere, including China, and “acknowledging that other markets have different laws.”

Apple reportedly struck a secret deal worth $275 billion with China in 2016 to lower regulatory railings. China asked the company to display some disputed areas larger than surrounding areas or lose out on selling its Apple Watch in the country.

Most US technology still banned on China’s ‘Great Firewall’
While some companies lean back to please the ruling Communist Party, many do not have that option.

China’s “Great Firewall” has squeezed foreign social-media firms, as the party controls what content its citizens are allowed to view and censor posts that are harmful to its cause.

Facebook, Twitter and Google’s YouTube were blocked in 2009 for not complying with government demands, but some Chinese users can still access sites with virtual private networks.

Facebook hasn’t attempted to make progress in China since then, as Time previously reported. But revenue through advertising by Chinese companies continues to grow. And in April, the platform was criticized for allowing China to run state ads denying persecution of Uighur Muslims.

Google pulled its search engine in 2010 because it was fed up with censorship demands. But that didn’t stop it from trying to sneak back into the market. It also launched an artificial intelligence research center in Beijing in 2017 and worked briefly on a covert, censored search engine called Project Dragonfly.

“We need to understand what’s going on out there to motivate us. It’s not just a one-way street. China will teach us things we don’t know,” the project’s search head told employees at the time.

And strained US-China relations aren’t helping anything. Analysts expected some animosity to subside under the Biden administration, “and ultimately it has been the exact opposite,” Wedbush told clients this month.