Why Tim Cook and Ginni Rometty Spent the Weekend in China

March 20, 2017, 2:01 PM UTC
Apple CEO Tim Cook Testifies At Senate Hearing On U.S. Tax Code
Photograph by Chip Somodevilla — Getty Images

While you were enjoying your weekend, Apple CEO Tim Cook was making headlines with a rare public appearance in China—his first-ever speech at the government’s annual World Development Forum—where he reaffirmed the tech giant’s commitment to globalization. “I think the worst thing would be to—because it didn’t help everyone—is to say it’s bad and do less of that,” Cook told attendees. Countries that isolate themselves, he warned, do so to the detriment of their people.

His comments were directed as much, of course, to Apple’s hometown audience in America as they were to Chinese officials leery of President Trump’s frequent criticism of the country’s economic policies and worried about the impact the new President’s still-undefined policies might have on the strategy of U.S. companies.

China remains Apple’s second-most important market outside the United States (although India is rising fast), so Cook’s diplomatic mission makes sense. The company continues to make big investments in the country despite political pressure to bring more of its manufacturing activities back to the United States. On the day before Cook’s speech, Apple said it would build two more research and development centers there in Shanghai and Suzhou. That makes four so far, at a cost of about $500 million.

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IBM’s CEO Ginni Rometty was also in Beijing Sunday, where she signed her company’s new partnership with a division of a huge local conglomerate, Wanda Group. This is IBM’s second big foray into China’s cloud services market, which is tightly controlled from a regulatory standpoint. Few details were disclosed about the new alliance, but IBM will share revenue with its new ally.

Apple and IBM are far from alone in their need to strengthen their friendships in China, ahead of possible changes to the U.S.-Chinese trade relationship. Cisco pledged $10 billion to the market back in 2015, so it also has plenty at stake. During remarks last month at another conference outside the United States, the Mobile World Congress in Barcelona, Cisco CEO Chuck Robbins sounded a positive note about what he believes will eventually go down. “I think the policies and the things that will be rolled out will ultimately enhance the opportunity for the global economy to grow as well as the U.S. economy to grow,” he said during a media briefing. “I think most people actually share the belief.”

Let’s hope his optimism isn’t misplaced.

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