You fundamentally misunderstand what’s going on here. Apple has reluctantly agreed to comply with the dictate of China’s totalitarian government that the mostly encrypted data of Chinese customers is stored on servers run by a Chinese (government affiliated) company. It’s other option was to withdraw from China altogether.
You have made the assumption that because encrypted customer data is stored on Chinese servers, that that’s the same thing as the Chinese government having access to read that data. It isn’t.
How would Apple respond if it was ordered to do this? We don’t know, because it hasn’t happened yet. But we know that in the US it took the option of not just straightaway complying, and instead fought its position and was willing to go through the court system to make its arguments. These options don’t exist in China.
To reiterate – Apple can comply with the request to store its customers encrypted data on Chinese servers, or withdraw from the Chinese market entirely. That last option doesn’t seem to be in the best interests of anyone, including Chinese Apple customers.
You seem to think a third option exists, where Apple can simply refuse to follow the orders of a totalitarian government, and keep operating exactly as before. Apple would find its products gone from Chinese stores, its factories closed and its online services shut down in about half a nanosecond if it tried that.
Would it refuse to comply with a request to hand over all its customers data to the Chinese government? Well, interestingly, that request hasn’t come yet. Ask yourself why.
Is it because the Chinese government hasn’t got around to asking Apple yet? Or is it because it suspects that it would be the red line that Apple might indeed refuse to cross – as it did in the US – and the Chinese government don’t want to lose Apple altogether. Apple brings wealth and status to China, and China’s economy depends on it appearing open to global business investment – especially manufacturing.
It’s a balancing act. A behind-the-scenes power struggle, where one party has most – but not quite all – of the cards. Odd that a totalitarian government understands the nuance of the situation better than most western pundits.
