Hey J R do you think Dan is gettin' nervous?
IBM forecasts boost from China
reforms
By Scott Hillis, Reuters
February 23, 1998 7:41 AM PST
BEIJING - Computer giant IBM Corp expects radical
reforms of China's state-owned and financial sectors
will boost its sales there despite regional economic
woes, company officials said on Monday.
The shakeup of China's ailing state firms endorsed by
Beijing last September would spur demand for information
technology (IT) such as networking software and links to
the Internet, said Henry Chow, chairman of IBM (IBM)
Greater China Group.
"Companies will embark on building their own intranets
whereby employees in those agencies can collaborate,
share information and improve productivity and
efficiency," Chow told reporters.
"The pie will get much, much bigger and everybody in the
IT industry will get a chance, but we are positioning
ourselves, I hope, to get a major portion of this pie,"
Chow said.
IBM was keenly watching Asia's recent economic turmoil
but believed that relatively low spending by Chinese
companies on information technology meant there was
still a lot of room for growth, Chow said.
"It is too early for us to worry because I think there is
some inherent pent-up demand in the area of information
technology," he said.
IBM is already cashing in on Beijing's policy to leapfrog
into the information age.
China's four state-owned commercial banks, with 150,000
branches and millions of employees, are some of IBM's
biggest clients.
Reforms to modernise China's banking sector and a
proposal to replace several ministries with giant holding
companies would create opportunities for IBM to push its
strategy of "e-business," or electronic commerce and
networking.
"The financial reform the People's Bank of China is
pushing will be positive to a solution provider like us,"
Chow said.
Another customer is the Ministry of Railways, a sprawling
organisation with 3.5 million employees.
IBM is helping the ministry to computerise and upgrade
its system that oversees the thousands of trains that
criss-cross the country and haul nearly two billion
passengers a year, Chow said.
The computer giant has invested $150 million in several
ventures making computers and parts. Last week it
announced a new $20 million project in the southern city
of Shenzhen to make components for hard disk drives.
Sales revenue in China grew by nearly 50 percent last
year, outpacing the industry as a whole by at least 15
percentage points, Chow said. He declined to give an
absolute figure for sales.
"Profits met corporate expectations," Chow said. "We
want to continue to have very strong growth in China. |
