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China's Lenovo Group, which acquired IBM's personal computers business in 2004, yesterday expressed deep concern about unfair measures taken by the US Congress and administration in relation to a recent contract.

 

In March, Lenovo bid successfully for a US State Department contract to provide 16,000 Lenovo Thinkcenter M51 desktop computers and equipment worth US$13 million through its US distributor CDW Government Inc.

 

However, under pressure from some members of the US Congress who said that purchasing computers from the Hong Kong-listed Lenovo, which they claim has backing from the Chinese government, could lead to intelligence leaks, the State Department said last week that it would reallocate 900 of the computers.

 

They were originally supposed to be deployed in a classified network and will now be used in unclassified networks.

 

The State Department also said it would revise its procurement process.

 

"The attitude of the US government is very unfair to a company like Lenovo, which is totally based on market operations. We are deeply concerned," said Yang Yuanqing, chairman of Lenovo.

 

After the Chinese company acquired the IBM unit, it had to make several changes, including moving its global headquarters to the US and building a separate campus.

 

Also, five American directors sit on its 12-member board.

 

Last year, Lenovo agreed to produce computers to be supplied to US government agencies. To ease worries of information security, Lenovo promised that the sales and services functions would be undertaken by its US partners.

 

Yesterday, the company urged the US administration to provide a fair and level playing field, and also called on the Chinese government to help Chinese companies secure equal treatment in the US.

 

Eagle Zhang, general manager of Analysys International, a market consultant, said the State Department's change of the attitude does not change the volume of this contract, but it might set a precedent for other US government agencies and enterprises.

 

He added that computers are standardized and transparent products, and it is impossible for manufacturers to elicit information from them.

 

"What is the logic when a product is OK if it is called IBM Thinkcenter, but not OK if it is called Lenovo Thinkcenter?" Zhang said.

 

Also yesterday, the Chinese Ministry of Foreign Affairs expressed the hope that the US would ease restrictions on high-tech exports to China.

 

"We hope the US will abandon its Cold War mentality ... and relax restrictions on high-tech exports to China and promote bilateral cooperation on trade in high-tech products,"  spokesman Liu Jianchao of the Ministry of Foreign Affairs said.

 

(China Daily May 24, 2006)