China's Real Motive Against iPhones, A Hidden Message for U.S

China's Against iPhones

China's recent move to expand the ban on the use of Apple iPhones by government officials and employees of state-owned enterprises has raised fears and speculations about its true motives. While some may interpret this as a national security or economic measure, analysts suggest its main purpose is to send a strong global message.

Main Points

  • China's expanded ban on iPhones for government officials isn't just about national security or economics; This is primarily a message of defiance towards deteriorating US-China relations.
  • The move reflects China's growing nationalist stance, offering "pressure relief" amid economic challenges and growing anti-Americanism. sentiments both within and outside China.
  • While impacting Apple symbolically, the ban's real purpose is to assert China's power on the global stage and is part of a broader trend in US-China relations.

Last week, reports confirmed that China has extended restrictions on the use of Apple iPhones within government agencies and state-owned companies, causing Apple (AAPL) stock to fall to a one-month low. Although China declined to impose sanctions next week, it is becoming clear that the country is actively reducing its reliance on foreign technology. In parallel, the United States, citing national security concerns, in 2019 imposed restrictions on the ability of American companies to sell software and equipment to Chinese tech giant Huawei.

The Biden administration termed China's alleged ban as "undue retaliation" for US actions against Huawei. However, Douglas Nelson, a professor of economics specializing in trade policy at Tulane University and a fellow at the Leverhulme Center for Research on Globalization and Economic Policy at the University of Nottingham, argues that there is more to it than just retaliation.

"I suspect it's about public politics," says Nelson. "The Chinese government is saying, 'We will not be pushed around.' And it works well in China. Bashing America really works."

According to Nelson, deteriorating relations between the United States and China, especially since Xi Jinping assumed leadership a decade ago, have made a once-unimaginable war between these two countries a topic of discussion in geopolitical circles. This is one reason why the US took action against Huawei, a company that also raises concerns in the EU. It is worth noting that the report of the iPhone ban in China coincides with Apple's latest iPhone release and the launch of a New 5G Mobile Phone by Huawei, which has triggered an investigation by the US Department of Commerce.

Nelson says that in the context of the COVID-19 pandemic, China has become increasingly nationalistic in its announcements, providing a form of "decompression" for the Chinese public in the face of growing economic challenges. The perception that the US is acting as a bully is particularly strong in China and is echoed in other parts of Asia, including US allies such as India. This shows that China's intended message extends beyond its borders.

As far as Apple is concerned, the impact of the iPhone ban is likely to be more symbolic than financially damaging. J.P. Morgan said the sanctions "amplify the challenges in China" but represent only a minor financial risk for the company. Wedbush Securities agreed, believing that China's move was a "very limited warning shot" to select government agencies that would have negligible consequences on Apple's growth in China next year.

Still, Nelson emphasizes that the economic impact on Apple is not a primary concern for Xi Jinping and China. "They're doing something that's not economic," he argues. "It's nationalistic. It's adopting a policy that is visible, and that's a victory for the Chinese government."

Furthermore, this move is not simply a reaction to US action against Huawei or other Chinese companies like TikTok. This is part of a broader trend in relations between the two countries. Nelson expresses concern about the cumulative effect of such actions and the importance of maintaining a peaceful distance between the two superpowers. He concluded, "We are far better off if we stay away from fighting each other."
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