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To: Paul Ross
While not specifically, this type of transaction was predicted a long time ago.

There are three main forces at work here.

First, US companies are chomping at the bit to get into China but are having hell tapping the market there. Who else better to do that than the Chinese?

IBM just placed itsself as a rider on a Chinese company being able to effectively tap China. Its much more important to them than selling their PC division.

Two, the PC industry is playing out in large part. Its not what it once was in many ways. Of course it still has life, but PCs are becoming commodity items, especially in the west.

Third, China has a desire to expand from manufacturer to actual businessman. They want to have their corporations with a global reach and fully move up into what other countries have been doing for years. They are in essence wanting to move up the chain into an investor class, of sorts.

There have been several brands of Chinese origins that have done this already, and more are on the way.

In essence IBM is getting rid of its baggage and is picking up part of a company that is dynamic to China. The Chinese are also picking up insta-global presence.

214 posted on 12/12/2004 9:03:30 AM PST by maui_hawaii
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To: maui_hawaii
PC's have been commodites for 15 years. Still, they are the state-of-the-art commodity. And we just conveyed a huge piece of the action...U.S. market share, for the phantasm of 20% of one company's Chinese sales.

I am confidently going to predict right now that IBM will see no profits from this departure from economic reality. The stock market analysts on the Street obviously agrees...

While China might like to muscle in on the investment/business side of things, that, again, is not because they are truly becoming capitalist. It is another front in their attack on our capital equity markets. Another divide-and-conquer ploy. I recommend you read up on some of the Casey Institute studies on this. Closest thing today you will get to see of the old William Casey and Ronald Reagan at work...

216 posted on 12/12/2004 11:01:06 AM PST by Paul Ross (Debunking Poohbah thoroughly and completely for 4 years)
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