US May Block IBM-Lenovo Deal Over Security Issues
By Paul Denlinger
A US government interagency panel may block IBM's proposed sale of its PC unit to Lenovo over security concerns. The Lenovo purchase of IBM's unit is, so far, the largest single sale of a name-brand US company to a Chinese company, and has raised the concern of US isolationist forces who oppose globalization and economic integration.The IBM-Lenovo deal has raised awareness of China's increasing importance and economic power, especially in the US mainstream media, which is always looking for a new boogeyman to blame for the US's economic ills. The most important economic issue facing the US now is its massive and growing current account deficit, a problem the US government and Congress are responsible for creating by massive overspending.On its own, the proposed deal is not economically significant. It simply represents an opportunity for IBM to get rid of a money-losing operation, while giving Lenovo an opportunity to train its workforce in American ways of management, and exposing it to a western work culture.The issue raised has been phrased in particularly nebulous terms, saying that one of the IBM manufacturing facilities could be used as a base for spying. The difficulty with this charge is that it turns the normal process of assuming that an accused party is not guilty, and assumes that they are guilty of espionage intentions without asking for any proof of guilt. For this reason, it is a political decision disguised as a security decision.This writer questions whether the PC industry can even be called "hi-tech", as the technology and manufacturing skills are so common. Any PC manufacturer is more of an assembler than a technology developer since the CPU is made by another manufacturer, most frequently Intel, which already has packaging operations in China. The accusation cuts to the core of the Bush administration's policy towards China. If the Bush administration opposes any judgment against Lenovo, it will please US businesses and Wall Street, but it will offend some of the isolationist forces which oppose "the export of American jobs and leadership in technology," and have found spokespersons in Lou Dobbs on CNN and Pat Buchanan in the Republican party.Through its decision, the Bush administration will be forced to reveal what it really thinks of China.
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