Why is China banning officials and state employees from using iPhones?

As per reports, the Chinese government is preventing its officials and state-owned enterprise workers from utilizing iPhones.

On Thursday, The Wall Street Journal published a report stating that a directive was given by Beijing to ban the usage of Apple devices by officials of the central government.

Bloomberg's report on Friday stated that the prohibition also encompassed establishments with government support and ownership, and would soon extend to various entities under governmental influence.

China's actions, which haven't been made public by government channels, are the most recent development in the ongoing trade and technology conflict between Beijing and Washington.

Why IPhone Ban Now?

Although it spells trouble for Apple and may serve as a warning for other technology companies based in the West, the prohibition of these companies in China was not unforeseen by those monitoring the situation in the country.

Both America and China have started taking measures to decrease their economic dependence on each other due to growing worries about national security issues. Investment and trade are no longer the top priorities for both nations.

The city of Beijing is working hard to reduce its reliance on technology from other countries, and instead support companies within its own borders. One of these businesses is Huawei, which is based in Shenzhen and has just released its new Mate 60 Pro smartphone. Experts in the technology industry have said that this device can compete with the iPhone.

Bank of America has observed the peculiar timing related to the restriction of iPhones, considering the recent introduction of the Mate 60 Pro.

According to Chim Lee, a China analyst with the Economist Intelligence Unit, limiting one's usage of iPhones can contribute to enhancing cybersecurity as these devices can access local networks that could collect environmental information. This aligns with the government's pledge to strengthen its cybersecurity measures. Al Jazeera reported this notable statement.

According to Lee, China has been attempting to address cybersecurity vulnerabilities through the implementation of new laws and regulations since 2016. However, their efforts were previously hindered by technological limitations. Recently, they have made progress in this area.

According to him, the government's decision to implement these cybersecurity measures might have been influenced by the latest technological advancements.

China and the US have concerns about each other's technology companies, as they may be seen as possible security threats that could allow unauthorized access to vital data and even government infrastructure.

During the month of May, the state of Montana was the first in the United States to prohibit the use of TikTok, a social media app whose ownership is based in China, due to concerns related to the privacy of user data. Several other states are currently considering implementing comparable restrictions.

The app has been prohibited on phones that are provided by the US federal agencies and a multitude of state governments.

The United States government has imposed restrictions on Chinese tech companies, including Huawei, and prohibited American businesses from engaging in any transactions with them. Additionally, US-based chip manufacturers are not allowed to supply China with cutting-edge technology.

Questions have been raised regarding the efficiency of export controls with the launch of the Mate 60 Pro. This particular device boasts an advanced Kirin 9000s processor.

Last week, Jake Sullivan, the National Security Adviser of the United States, stated that President Joe Biden's administration is in the process of acquiring additional details about the nature and components of the smartphone. The objective of this inquiry is to determine whether the law was disregarded.

Impact Of IPhone Ban On Western Tech Firms?

On Friday, the stock price of Apple plummeted by almost 6 percent, causing the world's most valuable company to lose almost $200 billion of its value in just a few days.

The prohibition has also caused concern among Western enterprises conducting business in China in general, as they contemplate whether foreign companies are truly accepted in the globe's second-biggest financial system.

Although Chinese officials claim that the country is resuming economic activities after facing the worst of the COVID-19 outbreak, law enforcement authorities have conducted many raids on foreign companies like Mintz Group, and newly implemented anti-spying regulations have made it challenging to conduct business and obtain important information.

The security environment is becoming more and more tense, and this is just one of the many issues that foreign companies are dealing with. Other challenges include the impacts of the pandemic, theft of intellectual property, discrimination by the government towards domestic companies, and problems with regulations.

The new limitations placed on Apple might lead to uncertainty about conducting commerce in China, particularly because the American tech company had a comparatively favorable rapport with the Chinese government until very recently.

China is an essential market for Apple, accounting for roughly 20% of its worldwide sales. In the past, Apple has shown a willingness to follow Beijing's regulations and requests concerning control. For instance, they removed VPNs from their Chinese iOS store to stop users from circumventing internet censorship.

Just last March, the head of Apple, Tim Cook, had a discussion with the Premier of China, Li Qiang, at a location in Beijing.

On Friday, Bill Bishop, the creator of the widely-read Sinocism newsletter, expressed doubt about the common notion that Apple is somehow immune to any negative effects stemming from the escalating tensions between the United States and China. He cautioned that this perception of the tech giant's invincibility may be misplaced as time goes on.

How Will China Be Affected By The IPhone Ban?

The prohibition will not stop regular individuals residing in China from purchasing the iPhone 15, which will be launched soon, as well as other products produced by Apple.

However, it highlights the increasing conflict between Beijing's aim to dominate and the economic prospects of China.

Firms, like Apple, had already started moving their manufacturing and financial resources out of China. However, the prohibition might quicken this movement.

The US Commerce Secretary, Gina Raimondo, expressed recently that overseas technology businesses were beginning to perceive China as impractical for investment because of the developing antagonistic corporate climate.

The worsening attitude is likely to make the issues that China's economy is already facing after the pandemic even more severe. The lack of inflation, the decrease in exports, the problem in the real estate industry, and the unemployment of young people are already causing problems for the country's recovery.