Fergie's Tech Blog

Tech Companies' Ties to China Worry Some

Michelle Kessler writes in USA Today:

The American tech industry's increasingly close relationship with China has more U.S. government officials worried — and taking action.

PC-maker Lenovo, which is partly owned by the Chinese government, is defending a new $13 million deal to sell 16,000 PCs and accessories to the U.S. State Department, amid claims it is improperly funded and influenced by China. (The deal was brokered by reseller CDW Government.)

Lenovo's troubles come amid rising trade protectionism. A Dubai firm recently canceled plans to run several U.S. ports after congressional opposition. Tech giants Cisco Systems, Google, Microsoft and Yahoo were called before Congress to defend their cooperation with Chinese government censors in order to do business in that nation. And a Chinese firm, also citing Congress' resistance, last summer withdrew a bid for U.S. oil firm Unocal.

Lenovo was based in China until it bought IBM's PC division last year. Now it has a U.S. headquarters, an American CEO (former Dell executive William Amelio) and big investors including IBM and several U.S. holding companies. But the Chinese Academy of Sciences, a government body, remains the largest shareholder, owning 27%.

posted by Fergie @ 4/02/2006 07:41:00 PM