Why China's Stock Market Crash Is So Bad for Apple

China’s stock market has been crashing this summer, which is both a sign of and potentially a cause of underlying economic problems in the country. Those problems have also led to a reduction in the value of China’s currency. This instability has roiled global financial markets more generally, but Apple — America’s largest company — has been hit especially hard, losing 18 percent of its value over the past six months and wiping out many tens of billions of dollars of paper wealth.

The situation got so bad that Apple CEO Tim Cook recently took the extraordinary step of emailing CNBC anchor Jim Cramer to try to intervene in the stock slide, assuring investors that “growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last 2 weeks.” The reassurance did at least some good in halting the slide, though Apple shares are still far from making up their losses.

Apple has an unusually heavy exposure to problems in the Chinese economy for reasons that aren’t addressed by Cook’s letter.

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This article originally appeared on Recode.net.

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