GUIYANG, China — On the outskirts of this city in a poor, mountainous province in southwestern China, men in hard hats recently put the finishing touches on a white building a quarter-mile long with few windows and a tall surrounding wall. There was little sign of its purpose, apart from the flags of Apple and China flying out front, side by side.
Inside, Apple was preparing to store the personal data of its Chinese customers on computer servers run by a state-owned Chinese firm.
Tim Cook, Apple’s chief executive, has said the data is safe. But at the data center in Guiyang, which Apple hoped would be completed by next month, and another in the Inner Mongolia region, Apple has largely ceded control to the Chinese government.
Chinese state employees physically manage the computers. Apple abandoned the encryption technology it used elsewhere after China would not allow it. And the digital keys that unlock information on those computers are stored in the data centers they’re meant to secure.
Internal Apple documents reviewed by The New York Times, interviews with 17 current and former Apple employees and four security experts, and new filings made in a court case in the United States last week provide rare insight into the compromises Mr. Cook has made to do business in China. They offer an extensive inside look — many aspects of which have never been reported before — at how Apple has given in to escalating demands from the Chinese authorities.
Two decades ago, as Apple’s operations chief, Mr. Cook spearheaded the company’s entrance into China, a move that helped make Apple the most valuable company in the world and made him the heir apparent to Steve Jobs. Apple now assembles nearly all of its products and earns a fifth of its revenue in the China region. But just as Mr. Cook figured out how to make China work for Apple, China is making Apple work for the Chinese government.
Mr. Cook often talks about Apple’s commitment to civil liberties and privacy. But to stay on the right side of Chinese regulators, his company has put the data of its Chinese customers at risk and has aided government censorship in the Chinese version of its App Store. After Chinese employees complained, it even dropped the “Designed by Apple in California” slogan from the backs of iPhones.
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China’s leader, Xi Jinping, is increasing his demands on Western companies, and Mr. Cook has resisted those demands on a number of occasions. But he ultimately approved the plans to store customer data on Chinese servers and to aggressively censor apps, according to interviews with current and former Apple employees.
“Apple has become a cog in the censorship machine that presents a government-controlled version of the internet,” said Nicholas Bequelin, Asia director for Amnesty International, the human rights group. “If you look at the behavior of the Chinese government, you don’t see any resistance from Apple — no history of standing up for the principles that Apple claims to be so attached to.”
While both the Trump and Biden administrations have taken a tougher line toward China, Apple’s courtship of the Chinese government shows a disconnect between politicians in Washington and America’s wealthiest company.
Mr. Cook has been on a charm offensive in China, making frequent, statesmanlike visits and meeting with top leaders. On one trip in 2019, he toured the Forbidden City, met with a start-up and posted about the trip on the Chinese social platform Weibo.
Behind the scenes, Apple has constructed a bureaucracy that has become a powerful tool in China’s vast censorship operation. It proactively censors its Chinese App Store, relying on software and employees to flag and block apps that Apple managers worry could run afoul of Chinese officials, according to interviews and court documents.
A Times analysis found that tens of thousands of apps have disappeared from Apple’s Chinese App Store over the past several years, more than previously known, including foreign news outlets, gay dating services and encrypted messaging apps. It also blocked tools for organizing pro-democracy protests and skirting internet restrictions, as well as apps about the Dalai Lama.
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And in its data centers, Apple’s compromises have made it nearly impossible for the company to stop the Chinese government from gaining access to the emails, photos, documents, contacts and locations of millions of Chinese residents, according to the security experts and Apple engineers.
The company said in a statement that it followed the laws in China and did everything it could to keep the data of customers safe. “We have never compromised the security of our users or their data in China or anywhere we operate,” the company said.
An Apple spokesman said that the company still controlled the keys that protect the data of its Chinese customers and that Apple used its most advanced encryption technology in China — more advanced than what it used in other countries.
Apple added that it removed apps only to comply with Chinese laws. “These decisions are not always easy, and we may not agree with the laws that shape them,” the company said. “But our priority remains creating the best user experience without violating the rules we are obligated to follow.”
Mr. Cook declined an interview for this article. In public appearances, he has said that while he often disagrees with China’s laws, the world is better off with Apple in China.
“Your choice is: Do you participate? Or do you stand on the sideline and yell at how things should be?” he said at a conference in China in 2017. “My own view very strongly is: You show up and you participate. You get in the arena, because nothing ever changes from the sideline.”
No Plan B
In 2014, Apple hired Doug Guthrie, the departing dean of the George Washington University business school, to help the company navigate China, a country he had spent decades studying.
One of his first research projects was Apple’s Chinese supply chain, which involved millions of workers, thousands of plants and hundreds of suppliers. The Chinese government made that operation possible by spending billions of dollars to pave roads, recruit workers, and construct factories, power plants and employee housing.
Mr. Guthrie concluded that no other country could offer the scale, skills, infrastructure and government assistance that Apple required. Chinese workers assemble nearly every iPhone, iPad and Mac. Consumers in the region pay Apple more than $55 billion a year, by far the most of any American company in China.
“This business model only really fits and works in China,” Mr. Guthrie said in an interview. “But then you’re married to China.”
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The Chinese government was starting to pass laws that gave the country greater leverage over Apple, and Mr. Guthrie said he believed Mr. Xi would soon start seeking concessions. Apple, he realized, had no Plan B.
“For Chinese authorities, this is no longer about, ‘How much money are you pouring into China?’ This is about, ‘What are you giving back?’” Mr. Guthrie said.
Mr. Guthrie delivered his warning to Mr. Cook’s top deputies, including Phil Schiller, a longtime marketing chief; Eddy Cue, head of internet software and services; Lisa Jackson, the company’s government affairs chief; and Jeff Williams, its operations chief, who is widely viewed as Mr. Cook’s right-hand man.
As Mr. Guthrie was delivering his warnings, Apple set about keeping the Chinese government happy. Part of that effort was new research and development centers in China. But those R&D centers complicated Apple’s image as a California company. At a summit for its new Chinese engineers and designers, Apple showed a video that ended with a phrase that Apple had been inscribing on the backs of iPhones for years: “Designed by Apple in California.”
The Chinese employees were angered, according to Mr. Guthrie and another person in the room. If the products were designed in California, they shouted, then what were they doing in China?
“The statement was deeply offensive to them,” said Mr. Guthrie, who left Apple in 2019 to return to his home in Michigan. “They were just furious.”
The next iPhone didn’t include the phrase.
‘Golden Gate’
In November 2016, China approved a law requiring that all “personal information and important data” that is collected in China be kept in China.
It was bad news for Apple, which had staked its reputation on keeping customers’ data safe. While Apple regularly responded to court orders for access to customer data, Mr. Cook had rebuffed the F.B.I. after it demanded Apple’s help breaking into an iPhone belonging to a terrorist involved in the killing of 14 people in San Bernardino, Calif. Now the Chinese government had an even broader request.
Other companies faced a similar dilemma in China, but Apple was uniquely exposed because of its high profile and acute dependence on the country.
Apple’s iCloud service allows customers to store some of their most sensitive data — things like personal contacts, photos and emails — in the company’s data centers. The service can back up everything stored on an iPhone or Mac computer, and can reveal the current location of a user’s Apple devices. Most of that data for Chinese customers was stored on servers outside China.
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Apple’s China team warned Mr. Cook that China could shut down iCloud in the country if it did not comply with the new cybersecurity law. So Mr. Cook agreed to move the personal data of his Chinese customers to the servers of a Chinese state-owned company. That led to a project known inside Apple as “Golden Gate.”
Apple encrypts customers’ private data in its iCloud service. But for most of that information, Apple also has the digital keys to unlock that encryption.
The location of the keys to the data of Chinese customers was a sticking point in talks between Apple and Chinese officials, two people close to the deliberations said. Apple wanted to keep them in the United States; the Chinese officials wanted them in China.
The cybersecurity law went into effect in June 2017. In an initial agreement between Apple and Chinese officials, the location of the keys was left intentionally vague, one person said.
