The Chinese government and Teamsun Technology Co. Ltd. are engaging with IBM on server cloud technology for industrial applications, according to a statement released last December. According to a report in the New York Times today, “In the past 16 months, IBM has agreed—and received permission under United States export laws—to provide the Beijing company, Teamsun, with a partial blueprint of its higher-end servers and the software that runs on them.”
According to a Chinese government statement (Chinese language) released in December, Shen Changxiang will serve as chief scientist for the effort to “digest and integrate IBM’s core hardware and software technologies” related to chips, servers, storage, software, and green initiatives. According to the Times, Shen Changxiang “…once supervised the cybersecurity of China’s strategic missile arsenal and spearheaded computer security research for the navy…” and “…warned of the perils of his country’s reliance on American technology.”
The Times continues, “Yet in December, the 74-year-old former military engineer, one of China’s top-ranking cyberofficials, quietly started working with a company synonymous with American technological prowess: IBM. Mr. Shen’s task is to help a little-known Chinese company absorb and build upon key technologies licensed by IBM….”
The initiative, according to the Times, has prompted critics to say IBM is placing short-term business needs ahead of long-term political and trade goals and has prompted the Obama administration “…to persuade Beijing to drop new measures that require American companies to hand over technology in exchange for market access.”
IBM says the initiative is part of a licensing program called Open Power. The Times quotes Edward Barbini, an IBM spokesman, as saying, “Our Open Power partners in China are getting access to the same technology that we make available to all Open Power members around the world. We’ve been very transparent with all our stakeholders on this strategy, including the Obama administration, about our plans to expand both the Open Power community and IBM’s technology partnerships around the world.”
The Times quotes Willy C. Shih, a professor of technology and operations management at Harvard Business School, as saying, “You have Chinese policy interests, U.S. policy interests and IBM policy interests — realistically, your hope of aligning these is not all that high. I think it’s a tough call for IBM.”
Speaking at a March panel discussion in Beijing, IBM chief executive Virginia M. Rometty said, “Foreign firms need to collaborate with Chinese companies to grow new industries—nowhere is this truer than in the IT sector.”
