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
Scrapping the Human Rights Act: What about privacy and freedom of expression?
Justice minister's attack to destroy ability to challenge state
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
Hey Brit taxpayers. You just spent £4m on Central London ‘innovation playground’
Catapult me a Mojito, I feel an Digital Innovation coming on
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
EU probes Google’s Android omerta again: Talk now, or else
Spill those Android secrets, or we’ll fine you
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.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.