IBM moves into the hinterland

Like many other IT producers taking a hit from the global economic slowdown, International Business Machines Corp is looking for new markets to shield it from the slump in the US, Europe and Japan.

IBM has cast its eye on relatively less-developed western China, the backyard of Mianyang-based Changhong Group. Not content to be the nation's largest producer of television sets and other consumer electronics goods, Changhong has cooperated with IBM for years on developing its capability to provide telecommunications and other IT services in Sichuan province.

That arrangement has deepened with IBM's acquisition of nearly 30 million shares of Sichuan Changhong Electric, Changhong Group's TV manufacturing subsidiary that is listed on the Shanghai Stock Exchange, on Jan 15 at 3.64 yuan apiece, valuing the transaction at 108 million yuan, a 1.56 percent stake in the company. IBM is now the second-largest shareholder in the company after Changhong Group.