Apple, China, and the FBI

David Pierson reports in the L.A. Times,

Apple Inc. has come out swinging in its pitched battle with the government on its home turf.

But when it comes to its second-largest market, China, the Cupertino, Calif., company has been far more accommodating.

Since the iPhone was officially introduced in China seven years ago, Apple has overcome a national security backlash there and has censored apps that wouldn't pass muster with Chinese authorities. It has moved local user data onto servers operated by the state-owned China Telecom and submits to security audits by Chinese authorities.

The approach contrasts with Apple's defiant stance against the FBI, which is heaping pressure on the company to decrypt an iPhone that belonged to San Bernardino shooter Syed Rizwan Farook.

The years-long strategy in China is paying off at a crucial time. While sales of Apple products have flatlined or declined in the U.S., Europe and Japan, business in the company's greater China region continues to soar — to a record $59 billion last year. The Asian giant surpassed the U.S. last year as the No. 1 buyer of iPhones and could one day be the largest market for Apple Pay, the mobile payment platform that was rolled out for Chinese consumers last week.

But there's no guarantee the good times will continue rolling for Apple. Beijing is increasingly tightening the screws on foreign technology companies, having introduced strict laws aimed at policing the Internet and digital hardware.

The environment will get even tougher, Apple says, if the FBI prevails in seeking a so-called backdoor to Farook's phone. That could set a precedent for China's authoritarian leaders to demand the same in a country where Apple has never publicly defied orders.

"What's driving this is Apple's desire to persuade the global market, and particularly the China market, that the FBI can't just stroll in and ask for data," said James Lewis, senior fellow at the Center for Strategic and International Studies in Washington. "I can't imagine the Chinese would tolerate end-to-end encryption or a refusal to cooperate with their police, particularly in a terrorism case."

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