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To: stockman_scott who wrote (110949)	3/23/1999 7:41:00 AM
From: Dorine Essey	Respond to of 176387

IBM to Boost Investment in China's Internet-Linked Companies Bloomberg News March 23, 1999, 2:32 a.m. PT Beijing, March 23 (Bloomberg) - International Business Machines Corp., the world's biggest computer maker, plans to expand its software investments in China to tap one of the world's fastest growing markets for information technology. IBM now operates two ''software enabling centers'' in Beijing and Shanghai to foster business applications over the Internet and plans to add five more centers soon, said John Thompson, senior vice president in charge of software strategy. IBM's software sales ''are very strong and well in excess of market growth rates,'' Thompson said. ''We are the No. 1 software company in China.'' Worldwide, IBM's software business is worth $13.5 billion. China's personal computer market grew almost 30 percent last year to almost four million units and is expected to increase another 25 percent this year, government and research companies say. Last year, China was the biggest PC market in Asia outside Japan, accounting for 37 percent of unit sales. The Internet arrived relatively late in China but the number of users is doubling each year. China's late entry has its advantages, however, with cities introducing the latest equipment, from advanced fiber optics to the newest mobile telephone technologies. IBM's Thompson is in China to promote greater use of the Internet for business activities. Among the companies using the Internet are the Xinhua news agency, which operates on-line editing and archive retrieval systems, and Hunan's Posts and Telecommunications Authority, which now allows phone users to settle their bills over the Internet, he said. The Armonk, New York-based IBM's investments in China are also producing technology for wider use, Thompson said. The company's China Research Lab, one of seven IBM research centers worldwide, has developed part of IBM's OBI, or open buying system, which allows companies to receive quotes and automate purchases over the Internet from vendors. IBM will launch the newest version of the software in the second quarter of this year, Thompson said. The laboratory has also developed an automatic translator for web sites, translating from Chinese into English or vice versa, Thompson said. Internet-related business accounts for about a third of IBM's software division, and is expanding at 20 percent to 30 percent per year, compared to about 10 percent for the division as a whole, Thompson said. Software is the second fastest growing division for IBM, behind services, which are expanding 20 percent to 30 percent per year, he said. Technology industries