China Has Not Banned iPhones, But The US Private Sector is Already in Panic Mode

Just the facts 

American chip maker Qualcomm has secured a court ruling in its favour from China’s Fuzhou Intermediate People’s Court. Qualcomm had accused Apple of using chips in some of its older iPhone models (iPhone 6S -iPhone X) that violate two of Qualcomm’s patents. As a result, judges have ruled that Apple models whose chips violate Qualcomm’s patents should be taken off the market. In response, Apple has stated that all of its current models are still on sale throughout China as of 11 December, while the company plans to appeal the ruling.

After the court’s decision was entered, many were quick to spread fake news in drawing linkage between the Fuzhou court’s ruling and the kidnapping and political imprisonment of Meng Wanzhou – the CFO of China’s chip and smartphone maker Huawei. The reality is that Qualcomm first launched a legal complaint against Apple in the Fuzhou Intermediate People’s Court in 2017. Nevertheless, there are several other significant geopolitical and economic implications of the ruling against Apple, while furthermore, the ruling presents an opportunity to shatter some frequent myths spread by China’s detractors.

China is doing everything the US claimed it wanted China to do – but the US is as unhappy with China as ever

The United States government’s frequent accusations against China are not only growing ever more absurd, but are becoming so bizarre that they are often the direct opposite of what is actually happening in modern China. The Apple vs. Qualcomm dispute presents the perfect opportunity to expose some of these contradictions.

What the US says: China doesn’t respect international intellectual property (IP) standards

What China does: A Chinese court just gave an impartial ruling in a long-running intellectual property dispute between two American companies. The judge’s decision to order a sales ban on certain iPhone models whose components had infringed on Qualcomm’s patents while giving Apple the right to appeal, makes it clear that not only does China respect the IP and business concerns of both parties, but that a system is in place to make sure that all sides can get heard through the kind of drawn out legal process that anyone who has filed an IP lawsuit in the US will be deeply familiar with.

What the US says: China doesn’t respect a rules based system

What China does: As has been the case for some time, the US private sector seems to understand China far better than the US government pretends to do. While Washington claims that China does not respect a rules based mentality, large American companies doing business in China, partnering with Chinese companies, running advertisements in China and suing fellow American companies in China clearly disagree. Just as US celebrities are known for suing tabloid magazines in English courts because of the frequency with which English courts grant injunctions against publications that make wild allegations against celebrities, so too are US businesses coming to realise that resolving their disputes through the Chinese legal system is necessary due to the fact that the Chinese market is supremely crucial to major US businesses with Apple and Qualcomm being but two such examples.

If US companies felt that Chinese courts were somehow corrupt or unreliable this would simply not be the case. Just as US courts once set international business standards, in future years, Chinese courts will be doing the same, due to the international importance of the Chinese market for major producers and brands.

What the US says: China persecutes its Muslim minority in Xinjiang

What China Does: China has set up vocational training programmes and social rehabilitation initiatives to help people in the once economically depressed province turn their lives around and become prosperous members of society. At the same time, Beijing has poured substantial investments into Xinjiang, while making sure that religious extremism is not allowed to take hold anywhere in China. In this sense, China is using similar methods to the Islamic Republic of Pakistan in respect of fighting religious extremism in spite of the fact that unlike Pakistan, China is a secular state.

By contrast, African-Americans make up only 13% of the entire US population but account for 40% of the entire US prison population. China clearly has a better record or providing economic opportunities for its domestic minorities than the US is doing for its domestic minorities.

What the US says: China keeps imports out of its markets

What China Does: China has long been a major importer of goods, including luxury items in the crucial automotive, technological, agricultural and textile sectors. This year, Shanghai hosted the first ever China International Import Expo (CIIE) where companies from around the world demonstrated their goods to Chinese investors and consumers in an effort to broaden the reach of imports within China’s vast domestic market (the largest in the world in terms of purchasing power parity).

With China looking to open its market to more imports than at any previous time in modern Chinese history, the only companies losing out are US companies hit by reciprocal tariffs thanks to Donald Trump’s signature trade war. If the trade war ended tomorrow, it would be better for US companies looking to sell to a large foreign market which in turn would be good for employment in the United States.

What the US says: China doesn’t believe in freedom

What China does: After US National Security Adviser John Bolton just revelled in the US orchestrated kidnapping and political detention of Meng Wanzhou, an innocent Chinese woman whose human rights are being violated due to the Canadian government’s subservience to its US ally, it is fair to say that in the minds of millions of Chinese and others, the US has totally lost credibility when it comes to the “freedom card”.

In reality, Chinese are not only living a free life, but if one bothers to investigate, many foreign media outlets frequently interview ordinary Chinese on the street about topical issues, thus giving an insight into the realities of a modern free China. The clip below is one such street style interview with ordinary Chinese produced by the non-Chinese outlet Asian Boss.

Conclusion 

The Qualcomm vs. Apple matter is an ongoing legal dispute being heard within the Chinese judicial system dating back to 2017. However, the fact that many are falsely claiming that China has “banned Apple products” in order to put pressure on Washington over the political imprisonment of Meng Wanzhou, makes it clear that much of the US private sector is already in panic mode due to the recklessness of the American and Canadian governments.

With China threatening Canada with “grave consequences” if Meng is not freed at once, many western businesses are concerned that some of these consequences will be a prolonged prohibition on their products being sold in China, as one of America’s extra-judicial motives for Meng’s captivity is to try and stifle the continued growth in Huawei’s global market share (earlier this year Huawei in fact eclipsed Apple as the single largest smart phone producer in the world). Banning US competitors to Huawei from operating in China could be one such consequence of Meng’s captivity, but Beijing is currently focused on securing her immediate release rather than engaging in prolonged and unnecessary hostilities with any foreign power.

Taken in totality however, the Qualcomm vs. Apple matter helps to shed light on the realities in China which are vastly different than that which the US government and media outlets sympathetic to the US government claim. This is true in respect of understanding the Chinese judiciary, Chinese social realities, Chinese economic realities and China’s mentality when it comes to the very serious matter of Meng Wanzhou.

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