Chinesepod - Godfather of information industry

BIZCHINA / Biz Who

Godfather of information industry
(China Daily)
Updated: 2006-06-05 10:34

The Lenovo story began in 1984 when Liu Chuanzhi, a 40-year old engineer
at the Computer Sciences Institute of the Chinese Academy of Sciences,
founded a computer company in Beijing. With a few colleagues and limited
capital, he began selling imported computers. The company, called
"Lianxiang" in Chinese and "Legend" in English, had its first success in
the development of a Chinese character card that translated English
operating software into Chinese characters.

In The Lenovo Affair, Ling Zhijun, a senior editor at the People's Daily
newspaper, charts the dramatic rise of Lianxiang/Legend. First it emerged
as China's biggest computer brand, then a listed company on the Hong Kong
stock exchange. Finally, with the acquisition of IBM's Personal Computing
Division, Lenovo became a global brand.

Although Lenovo is the third largest personal computer company in the
world, it remains surprisingly unknown outside China. Few people
understand how it suddenly became a global giant. This detailed look at
one of China's most successful companies provides a rare insider's view
into the Chinese economic system.

Ling makes important connections between the historical and political
events occurring in China in recent decades. He describes how changes in
government policy affected the company's growth, and the moves that Liu
Chuanzhi had to make in order to get around problems such as a lack of
finance.

Liu, who has been described as "the godfather of China's information
industries", is painted as a determined leader. But his road to success
was difficult. During the "Cultural Revolution" (1966-76), he developed
an unbreakable spirit and the ability to deal with complex human
relationships. Ling describes him as a man who knew his own scientific
shortcomings, but who wanted to turn technology into profit.

Liu Chuanzhi's greatest challenge was operating within the restraints of
the Chinese system. Surprisingly, he came up against many of the same
difficulties that foreign companies in China encounter, including the
lack of a legal framework for patents, the chaotic system for obtaining
import and export licences, and outdated accounting systems.

The Lenovo Affair fills an important gap in our understanding of China's
role in the modern business world. In addition, it is a powerful wake-up
call for those who just think of China as a huge untapped market for
foreign companies. Lenovo's success shows that Chinese companies also
aspire to become global players, and that acquisitions are one way for
them to gain access to global markets.

(For more biz stories, please visit Industry Updates)

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