Don't politicize business
By Li Shi (China Daily)
Updated: 2005-01-29 10:47

Change is always a source of nervousness. The IBM-Lenovo PC deal is a case in point.

Right after the news came that the US-based IBM proposed to sell its personal computer unit for $1.75 billion to Lenovo, China's top PC maker, market suspicion ran high.

Looking at it in a commercial sense, people were questioning whether Lenovo could turn the IBM PC arm into a profitable business.

The IBM unit, which supplies computers to US Government departments, was the third largest PC maker in the world last year.

On Thursday morning, Lenovo shareholders approved the deal at a conference in Hong Kong.

But things were more than a little different in the United States, where some House of Representatives members politicized the deal.

On Wednesday, three US House committee chairmen urged a government panel to probe into the deal's implications for national security.

They said it "may result in certain US Government contracts with or involving personal computers being fulfilled or participated in by the Chinese Government."

"National security" is a big concern that a nation cannot ignore.

A decision whether to undertake the month-long review or not will be made this weekend.

And given the political weight of the three figures - all chairmen of house committees - analysts generally agree the review will happen and the deal will go ahead.

The United States has laws relating to national security, as does every country, which requires reviews of potentially risky business transactions.

We respect their laws which focus on the sale of high-tech products.

But the question here is: Is the humble computer actually a high-tech product?

In name, they are still unanimously categorized as high-tech.

But they are not exclusively made in the United States. They are common around the globe and Chinese manufacturers have the technology to make them.

Most US PCs are already made overseas with standard parts. IBM products are the same.

Its flagship ThinkPad laptop is also made in China. There is no magic technology inside them.

In this sense, making PCs can be looked at as a low-tech operation.

The commercial consideration of Lenovo wanting to purchase IBM's PC unit is evident.

It is aiming to reach out further in a era of globalization with the help of IBM's worldwide marketing network and sophisticated R&D capacity.

The Chinese PC giant has been feeling growing pressure from domestic rivals.

For a public company, making a profit and becoming increasingly sustainable is the top consideration of any move.

Otherwise, the capital market would punish it. It is laughable that Lenovo would risk losses in an elaborate plot against "US national security."

Admittedly, the Lenovo Group is an important shareholder of Lenovo. The group was established in 1984 nominally by the Chinese Academy of Sciences, a public institution.

But we cannot ignore the fact that in the 1980s, individuals were not allowed to make investments.

After two decades of development, the group has largely shaken off the influence of government, mirroring China's market-oriented reform.

For a long time, the US Government has been claiming its huge trade deficit has been caused by Chinese manipulation.

The truth is, the US Government has imposed a slew of restrictions on exports of some so-called high-tech equipment to China, which has the manufacturing know-how to make the same products.

The current call for a review is in the same vein. Behind both are a deep, or even visceral, suspicion toward China.

It is ironic that a country where "money talks" cannot let business be business.

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