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system for obtaining import and export licences, and outdated accounting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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