(Bloomberg) — Apple Inc.’s (AAPL) Chief Executive Officer Tim Cook promised to keep investing in China during a meeting with Beijing’s top technology official, underscoring the country’s vital role in the iPhone maker’s global operations.
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Cook, making his second visit to the country this year, told China’s Minister of Industry and Information Technology Jin Zhuanglong that Apple would “continue to grow its investments in China and help the high-quality development of the supply chain,” according to a ministry post on WeChat.
Jin reportedly urged Cook in their Wednesday meeting to continue investing more in innovation in the country. They talked about Apple’s presence in China, cloud services and the secure management of online data, the agency said, without providing further details.
Chinese officials have been trying to attract investments from global companies to prop up its ailing economy, but foreign investors pulled a record amount of money from China in the second quarter, likely reflecting deep pessimism about the world’s second-largest economy. Apple fosters a significant number of suppliers, including the likes of iPhone assembler Luxshare Precision Industry Co. (002475.SZ), and supports millions of jobs in China.
China, the world’s largest smartphone arena, remains Apple’s most important market outside the US. Sales of Apple’s newest iPhones in China were up 20% in their first three weeks compared with 2023’s model, according to estimates from Counterpoint Research, lifting investor sentiment after some analysts cast doubt over demand.
Apple is working on offering AI services for Chinese customers as soon as possible, Cook told a reporter from local news outlet Jiemian on Wednesday. But Cook said his company needs to complete a comprehensive regulatory process first, the report said.
Apple has not found a partner for its AI offering in China after it signed a landmark deal with OpenAI to integrate ChatGPT into its latest phones. The Cupertino, California-based company also says Apple Intelligence will not currently work for iPhone models purchased in mainland China. OpenAI has taken steps to block ChatGPT access in China.
Chinese regulators require companies to obtain approval before they roll out generative AI services in the country, and so far no major US startup has managed to win a nod from Beijing, as emerging technologies become a key battleground for the world’s two largest economies.
Apple could turn to Alibaba Group Holding Ltd. (BABA) and Baidu Inc. (BIDU) about a potential AI partnership in China, Bloomberg News has reported.
Cook announced his arrival in China on Tuesday by posting several dispatches from his trip, including a visit to a suburban organic farm and an Apple store in Beijing — where he was pictured shaking hands with someone wearing a Vision Pro headset. In the photo of the farm visit, Cook was seen accompanied by Jeff Williams, his chief operating officer.
The Chinese government has tightened control over the flow of data in recent years. Apple announced in 2017 that it would build its first data center in China to comply with local regulations, which require global companies to store information within the country. Later Apple agreed to shift the storage of Chinese users’ data on the iCloud to server farms operated by Guizhou Cloud Big Data, a company with local government ties.
Last year, Jin, the information technology minister, outlined a blueprint to counter escalating US sanctions and to shore up “weak links” in the nation’s supply chain. In the lengthy column published on the Communist Party’s main magazine, he called for China to safeguard its domestic capabilities to build everything from plastic toothbrushes to jumbo jets and electric vehicles.
—With assistance from Qianwei Zhang.
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