“It isn’t clear why China suspended iTunes and iBooks, but I’m betting on iPhone encryption as the key issue. Investor Carl Icahn – long an Apple bull – dumped his Apple stock over China market concerns, I see a more direct threat,” Robin Harris writes for ZDNet.

“China’s ruling party is but a (heavily armed) flea on the back of the mass of the Chinese people. With the economy slowing and the nation facing a demographic cliff with a rapidly aging population and a weak social safety net, the Party is tightening its control for fear of social unrest,” Harris writes. “Obviously, unbreakable private communications is a threat to a totalitarian regime. And China has much more leverage over Apple than Uncle Sam.”

“The most important difference between the US and China for Apple is that most all of Apple’s products are manufactured in China,” Harris writes. “The government could shut down Hon Hai – Apple’s main manufacturing vendor – in a heartbeat, crippling Apple in a matter of days.”

Read more in the full article here.

MacDailyNews Take: With fear of social unrest over a slowing economy, how exactly does rapidly and further slowing the economy by laying off over a million of the country’s best-paid factory workers help China’s ruling party mitigate social unrest?

Apple is far from powerless in China.