China is expanding its ban on foreign mobile phones such as Apple iPhone and Samsung Galaxy for public officials and employees of state-run companies. It is interpreted that the purpose is to prevent concerns about information leaks amid the hegemonic conflict with the United States and to inspire patriotism among the people. In addition, analysis suggests that the intention was to indirectly support Chinese information technology (IT) companies and stimulate the economy by increasing the use of domestically produced products.
On the 15th (local time), Bloomberg News reported that in the past one to two months, state-owned enterprises and local government departments in at least eight provinces have issued instructions to their employees to “use only electronic devices from Chinese brands.” The eight provinces include Hebei, home to the world’s largest iPhone manufacturing plant, as well as the southeastern provinces of Guangdong, Zhejiang, Jiangsu, and Anhui, which have high income levels and developed economies.
Chinese authorities previously issued an ‘iPhone ban’ in September this year, ordering central government officials not to use American Apple iPhones. Beyond this, regulations on all foreign-made mobile phones are being strengthened.
Bloomberg analyzed that the intention behind this move is to weaken the influence of foreign technology and promote domestic Chinese brands. In the past, China also enacted the ‘Korean Wave ban’ to block the supply of Korean games to China. Although the nature of retaliation due to the deployment of ‘THAAD (Terminal High Altitude Area Defense)’ was strong, it was also analyzed that in the process, the Chinese gaming industry gained time to compete against the Korean gaming industry.
It is in the same context that China issued a ban on the use of the American electric vehicle Tesla in March 2021 for military personnel. It is said that it has prevented information leaks and created a space for Chinese domestic electric vehicle brands to grow.
This move is expected to have a significant negative impact on the domestic IT industry. According to market research firm Strategy Analytics (SA), Samsung Electronics’ market share in China reached 19.7% in 2013, but fell to 0.6% in 2021. Even after that, it has not been able to overcome the 1% barrier. If the Chinese authorities continue to ban foreign-made mobile phones, market share growth will likely not be easy.
Regulations on Apple’s iPhone could also have a blow to domestic companies that provide materials and parts to Apple. Apple’s major domestic partners are △Samsung Display and LG Display, which supply organic light-emitting diode (OLED) panels, △LG Innotek, which supplies camera modules, △Samsung Electronics and SK Hynix, which supply memory semiconductors such as DRAM, △and △which supply small batteries. Samsung SDI, etc.
According to LG Innotek’s report for the first half of this year (January to June), the proportion of sales from a single customer, estimated to be Apple, amounts to 75.1%. It is also known that Apple accounts for nearly half of Samsung Display’s annual sales as of last year. LG Display’s share of Apple is also estimated to be around 30-40%. An official in the parts industry expressed concern, “As the Chinese market accounts for a high proportion of iPhone sales, if this market shrinks, domestic partners will not be able to avoid the repercussions.”
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Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.