Feeds

China wants eight new Lenovos by 2015

Government decree says local firms should merge to reach global scale

Internet Security Threat Report 2014

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. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.