As tech companies pull back from Russia, China looks on with concern – CNBC

China’s smartphone market could decline in the second quarter as the country experiences a resurgence of covid cases, analysts said. But Apple could fare quite well, the analysts said as it continues to attract users in the high-end of the market.

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HONG KONG — Extensive efforts by Apple and other Western tech companies to curtail their business with Russia over its invasion of Ukraine have raised a question for product users in China: Could the same thing happen there?

Much of Chinese consumers’ concern has been focused on Apple, which like GoogleMicrosoft and other tech giants moved quickly to curb its Russia business after President Vladimir Putin invaded Ukraine on Feb. 24. The company has stopped product sales and exports, limited services like Apple Pay and removed the Russian state news outlets RT News and Sputnik News from the Apple Store outside Russia.

Russia’s invasion of Ukraine, as well as the global response, have been closely watched in Asia, where there are long-standing tensions between China and the self-ruling island of Taiwan, which Beijing claims as its territory. Chinese leader Xi Jinping has said “reunification” with Taiwan is inevitable and has not ruled out the use of force to achieve it, though the Taiwanese government says there are no signs of imminent attack. 

Chinese officials reject any comparison between Taiwan and Ukraine, saying only Ukraine is an independent country. But some online commenters in China, where social media is dominated by nationalist and pro-Russian sentiment, have criticized Apple’s actions in Russia and said China should prepare itself for similar tactics.

“If one day China finally decides to liberate Taiwan, who can guarantee that our own iPhones won’t get deactivated?” one user asked on Zhihu, a Chinese social media platform similar to Quora.

Experts say it would be difficult for Apple to walk away from China, which is a critical manufacturing center for the company as well as its third-largest market after the United States and Europe.

“It is a very different story than what is happening in Russia,” said Kendra Schaefer, head of tech research at Trivium, a policy research team based in Beijing.

Schaefer pointed out that Chinese regulations require Apple and other companies to store Chinese customers’ information on servers inside the country.

“The question would be, does pulling out of China mean that Apple not only loses its customers, but all of its customer data completely?” she said.

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