To get pass the compliance issue for apps on Apple’s App Store, Apple is seeking to register an entity within the Shanghai Free Trade Zone as a means to continue operating in the country.
The recent tensions between the United States and China have hurt trade relations between the two. One industry that might face hardships ahead is the tech industry.
Apple Removes Chinese Apps
Apple, which has millions of consumers in China and an active manufacturing hub operating out of the country, is already making plans to shift some manufacturing out of the country.
A new report says that China is already withdrawing all the concessions it gave to Apple to operate within the nation.
It recently removed 1000s of apps from the Chinese Apple store. For years, Apple had negotiated exemptions from Chinese regulators in exchange for the creation of millions of jobs, the billions of dollars in taxes it paid and the technology it transferred to a generation of Chinese suppliers.
A major exemption was the operation of its App Store in China, without a Chinese partner, which is mandatory for any foreign entity to operate. Apple has also apparently avoided sharing the source code for iOS with China so far, having negotiated an exemption with the Chinese government.
Also, many of the apps on the store are allowed to operate without prior approval from the Chinese authorities as it takes a long time for any apps to get passed by the administration, and in the meanwhile, the said app developers make profits on downloads in the interim.
Apple Purges Chinese Apps From Store
But the recent actions of the Trump administration, including the forced sale of the US operations of TikTok, the first Chinese-owned app to become a global hit, is racking up tensions. WeChat, owned by Chinese tech giants ByteDance and Tencent, in the US, have also been asked to discontinue operations. The US government and Huawei are already involved in legal restrictions. The US Commerce Department announced fresh sanctions that restrict any foreign semiconductor company from selling chips developed or produced using US software or technology to Huawei, without first obtaining a license to do so.
The US government has listed security reasons as the rationale for banning some of these operations in the country.
To get pass the compliance issue for apps on Apple’s App Store, Apple is seeking to register an entity within the Shanghai Free Trade Zone as a means to continue operating in the country without a Chinese joint venture partner, but Chinese officials have said they won’t grant it until Apple makes more concessions that allow regulators to approve what goes into the App Store.
This is not agreeable to Apple as it would give Beijing more power over what apps it publishes in China, said Apple officials. Until the issue is resolved, Chinese regulators could shut down the China App Store, which contains nearly 1.5 million apps, the report said.
Apple pulled more than 47,000 apps from the Chinese App Store earlier this month, as first reported by AppInChina.
This is not the first time that Chinese regulators have forced Apple to shut down some of its operations. In 2016, the iBookstore and iTunes Movies in China were shutdown just six months after the launch of these stores by Apple.
China is Apple’s biggest App Store market, with sales of $6.4 billion a year, according to data from Sensor Tower. Apple currently hosts roughly 60,000 games in China that are paid for or have in-app purchases.