Posted on 03/14/2005 8:46:35 PM PST by blue kangaroo
The smart IBM boys want to dump their troubles on to, and make better use of, the Chinese, but their bright strategies seem very strange to some politicians in Washington. Now, these politicians raise the big weapon: the national interest.
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The smart IBM boys want to dump their troubles on to, and make better use of, the Chinese, but their bright strategies seem very strange to some politicians in Washington. Now, these politicians raise the big weapon: the national interest.
What is the national interest, anyway? It is related to yet another secret weapon called national security. But overseas investors have invested more than US$560 billion in China so far. How can the Chinese stand this foreign "invasion"? In fact, China is becoming a global theater. It deeply wishes to share its progress with the outside world. So far, it has gained enormous progress in this new direction. As a result, countless foreign businesses are established in China. This new openness has immediately brought a booming economy. Its benefits go well beyond China. Both consumers and multinationals have gained huge benefits. As China's economy expands further, the world will gain more benefits.
Some people don't see it this way. They intend to block a free flow of business, goods and human potential in the old way. To them, free trade could undermine their old domination. Therefore, they must impose as many barriers as possible. Now, despite all the obvious benefits for the IBM-Lenovo deal, some of them see the opportunity to create barriers. So closing the door fits their mindset.
How can businessmen understand all this? Politicians and businessmen don't use the same language. Yet behind all this mess, there are additional issues. In particular, a fast-developing Chinese economy worries some people deeply. They fear that their old-style domination could fade away. So they want to grasp every opportunity to turn the tide. Some even wish to put sand in the engine. There is no way for them to see that fast-developing economies for India, China and other emerging nations are a necessity for a global peace and development. That is the essence of the real issue.
Business issues are never only about business. Human emotions are always behind business. What is more, they can become a mess when national feelings are involved. Breaking out of the Cold War mentality takes tremendous effort for everyone. Some people even feel that only they are entitled to progress and prosperity. But the truth is that prosperity belongs to the world - nobody has the intellectual patent over it.
In this case, the smart IBM boys wish to shoot down two birds with one stone: dump an unwanted business as well as gain a wider entrance to the exploding market of China. It makes good business sense. But when the news broke, Lenovo stock dropped some 30%. Why? Many investors worry whether the Chinese can make sense out of the IBM's troubled PC (personal computer) unit.
Such concerns are realistic. So how does Lenovo make a buck from this deal? So far, it has employed this strategy: squeeze hard on the towel and get some drops. Will it work for the resulting company? That is a big question. Even so, the Chinese love the challenge.
Nonetheless, if the deal does work, it paves the way for a general movement. That is, the developed markets will have China as a dumping ground. By doing so, they can better concentrate on high-value-added business. Well, not a bad idea. The Chinese are terribly good at wringing the towel. In this way, the best resources of both worlds can be better utilized. Well, that is a perfect picture. That is indeed one large way for world economic development in the next stage. Its benefits go to more and more people.
But all business people must deal with those big weapons - national interest and national security. There are man-made barriers everywhere, not just in Washington, DC. They show up in all sorts of ways. They exist in all nations, cities and streets. They can simply stop the people of the world from sharing one another's progress at large. Oh boy! When can we get out of the Cold War mentality? When shall we start to share with one another?
One old Chinese legend tells this story: A gentleman has great love for dragons. He paints them everywhere, on the doors, walls and furniture. His vast interest has impressed the real dragons. One day, they decide to visit him. Guess what? He runs away.
Do you see such a gentleman in real life? Let us hope that men like him only exist in storybooks. Or is it so? The world is deeply connected by economy and business. An airplane is made in the US, but its engine is made in Europe and its wheels made in Asia - with metals and raw materials coming from Africa, Latin America and Australia. It is widely used by global consumers. Its benefits go beyond any single nation. No single nation can dominate in the old way. But the old-world mentality is still going strong. The world has many obstacles to overcome before a meaningful common wealth and prosperity arrive.
It is time for us all to share one another's progress. It is time to focus on a common prosperity and joint responsibilities. Agree or not, the world will move on along this new direction, for its benefits reach more people than ever before. So this common benefit should become the core of globalization. Otherwise, only a few people can get benefits at the expense of the world.
George Zhibin Gu is a veteran business consultant based in China and is the author of a forthcoming book, China's Global Reach: Markets, Multinationals, and Globalization (Haworth Press, Fall 2005).
(Copyright 2005 George Zhibin Gu.)
I'd feel better if this weren't written by a Chinese. I have a more sinister take on this: China doesn't care if it loses PC share in the U.S. - it gets access to IBM technology and can sell to its own masses.
Hey! That was the liberal's line during the Cold War, both the Democrat Party and the Rockefeller Republicans. "We have to help the Soviets develop their economy lest we play into the hands of the Soviet hardliners and there will be war and it will be our fault. The Soviets want peace."
Well, better minds prevailed.
India may one day develop into a free market economy but how can China? Seems to me that the basis of capitalism is a social contract. The closest thing to that in China is Hong Kong it seems to me and IMO that's about to be crushed. We'll know more as the June elections get closer.
But the truth is that prosperity belongs to the world - nobody has the intellectual patent over it.
Silly Chi-coms. They think it's no different that stealing intellectual property.
Lenovo is a state owned enterprise. That's capitalism?
It is time for us all to share one another's progress.
Translation: stealing intellectual property is progress.
Speaking of books, The Coming Collapse of China, by Gordon Chang. Mr. Chang lived and worked in China for almost two decades.
This article is incredibly naive. To the writer, anyone who opposes the Chinese communists are radical jingoists of some long forgotten American past. If he would look closely at the Chinese government and military's egregious human rights violations and their very recent dangerous and destablizing posturing with respect to Taiwan, he might see that perhaps our relations with China deserve some pause. America should be careful not lose it's greatest companies to such an oversized, saber-rattling panda bear.
We don't have to worry about Lenovo. It's Huawei that is the problem.
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