China has reportedly banned the use of iPhones by central government officials. The Wall Street Journal reported that managers have been notifying staff of the ban via chat groups or meetings.
Shares in Apple tumbled 3.6% on Wednesday, September 6 following the news, closing at $182.91 in New York. It marked the biggest daily drop in a month. Before Wednesday, Apple had risen 46% this year.
The WSJ reports that Chinese officials had already been shunning iPhones since before the pandemic despite the apparent absence of a formal policy. The WSJ added that central government officials now use smartphones made by major domestic companies like Huawei.
This is not the first time the Chinese government has backed out on using US products. Back in 2022, some Chinese government ministries had banned Teslas from entering their premises over security fears. China is a significant market and manufacturing center for Apple, accounting for around 19% of its overall revenue.
The iPhone ban is retaliation for similar moves made by the United States against Chinese tech. Chinas Huawei and ZTE have long been subject to US restrictions. And in November 2022, the Biden administration banned approvals of new telecommunications equipment from both companies because they pose an unacceptable risk to US national security.
TikTok has also been banned from devices issued by multiple US institutions, including the House of Representatives, the City of New York, Montana, New Jersey, Ohio, Texas, and Georgia.