Feeds

China wants eight new Lenovos by 2015

Government decree says local firms should merge to reach global scale

Mobile application security vulnerability report

Western technology companies' view of China as the biggest pool of potential customers ever is looking less accurate than ever, after the Chinese government called for the formation of up to eight super-companies through mergers and acquisition by 2015.

The calls came as part of government plans designed to urge the consolidation and reorganisation of companies across nine key sectors – including rare earths, pharmaceuticals and shipbuilding – so that they can better compete overseas.

In the IT sector, the government wants between five and eight “backbone enterprises” – these must be internationally competitive multinationals with high brand awareness and annual sales of over 100 billion yuan (£10.2bn).

As pointed out by the Wall Street Journal, as of 2011 only Huawei and Lenovo of China’s tech firms can lay claim to such impressive revenue figures.

The grand scheme is to move China away from producing cheap, low-end tech products and instead focus a handful of big global brands on producing high-end goods as well as software and services – an area where domestic firms have until now failed to make a significant impact.

There was no detail on which firms the government hopes to grow into the next Huawei or Lenovo. However, the overriding focus in the document was on the need for mergers and acquisitions among Chinese firms to build the new breed of super companies and improve competitiveness by integrating vertical supply chains.

It has not always been possible for Chinese firms to acquire abroad, of course.

Huawei’s proposed acquisition of 3Com was derailed over national security concerns and it withdrew a proposed takeover of 3Leaf Systems after similar government interference.

Creating several more Lenovos in the space of two years may be a push even for a country as ambitious and full of cash as China. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.