China Guru Describes Unsuccessful Effort to Warn Apple of Dangers in Doing Business with Communists

In a recent article, the New York Times discusses Doug Guthrie, a leading expert on Chinese business, and his work at Apple. Guthrie claims that he warned Apple and similar companies of what was happening in the communist country, but the Masters of the Universe forged ahead with “uncomfortable compromises” to keep access to the massive market.

In an article titled “He Warned Apple About the Risks in China. Then They Became Reality,” the New York Times discusses Doug Guthrie, one of America’s leading experts on China’s turn towards capitalism who helped Apple navigate the Chinese market in 2014.

That year, Xi Jinping began putting pressure on Western companies in order to strengthen his control of the country. Guthrie realized that Apple was extremely vulnerable as almost all of its devices were assembled in the China region.

Guthrie began touring the company with a slideshow and a lecture to raise the alarm on the precarious position Apple was in. According to the Times, Guthrie met with various Apple executives saying: “Do you guys understand who Xi Jinping is? Are you listening to what’s going on here?” adding, “That was my big calling card.”

Samm Sacks, a China specialist at the New America Foundation, commented: “It was always difficult for Western companies to do business in China, but in many ways the challenges have shifted. The Communist Party is firmly in control, and both Western companies and Chinese companies in the private sector have been under attack.”

The NYT writes:

Mr. Guthrie’s career arc and evolving view of China tell the story of Western industry’s complicated dance with the country over the past three decades. Mr. Guthrie and many executives, politicians and academics had bet that Western investment in China would lead the country to liberalize. It is now clear that they miscalculated.

“We were wrong,” Mr. Guthrie said. “The wild card was Xi Jinping.”

In recent years, China shut down Marriott’s website after it listed Tibet and Taiwan as separate countries in a customer survey. It suspended sign-ups to LinkedIn after the site failed to censor enough political content. And the Communist Party urged a boycott of Western apparel companies that criticized forced-labor practices in Xinjiang, a Chinese region where the government is repressing Uyghurs, the country’s Muslim ethnic minority.

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