US Government May Not Approve Sale of IBM PC Unit 358
andy1307 writes "Xinhua, among others, quotes a Bloomberg report saying the Committee on Foreign Investments in the United States, or CFIUS, might block the sale of IBM's PC unit to Lenovo over national security concerns. CFIUS is made up of 11 U.S. agencies, including the Department of Justice, the Department of Homeland Security, and is chaired by the Treasury Department. They are concerned Lenovo employees might be used to conduct industrial espionage. The Bloomberg story said members of CFIUS were focusing their attention on an IBM facility in North Carolina of the United States. The same article says IBM hasn't produced its own PCs for several years and that the bulk of its production is done by manufacturing partners, largely in China. In the past, CFIUS has blocked the sale of Global crossing to Hutchison Whampoa because it would have meant Chinese control of the undersea cable communication network."
So it begins (Score:4, Insightful)
Laissez-Faire? (Score:5, Insightful)
I thought the US were supposed to be the laissez-faire free marketeers of the world?
If China was blocking US participation in their markets on these grounds, I've little doubt the US would be taking the matter to the WTO (and winning).
We will see what China has to say about this (Score:5, Insightful)
Cheney may have said that deficits don't matter, but sooner or later, he will learn that giving the largest dictatorship on Earth a large voice in your government is a bad idea. (Esp. when you are supposed to be promoting "freedom" and "democracy")
Re:Business ought to be left alone (Score:5, Insightful)
There is no connection between the first sentence and the second. In order to determine if there is any harm or not, a lot of factors need to be considered, mainly related to whether or not a company will increase what economists call "market power" and will get closer to a monopol status.
>> It's funny, the land of freedom and capitalism is taking steps that would make a communist plutocracy proud.
There is such a term in economy called "market power", which describes companies that have key resources and strategic positions on the market. In those cases, the "invisible hand" of offer and demand, that balances prices on the market, no longer works, because a firm is clearly advantaged compared to the others and in a position to get a monopoly status (Does Microsoft ring any bells?
I'm not saying that this is the case here; however, simply adjusting the balance doesn't mark this approach as communist. Depending on your position on the political spectrum, you might find this implication of government into the market more or less suitable. Still, no matter that, it is still far away from communist.
Re:Laissez-Faire? (Score:4, Insightful)
a. They are good at buying politicians(*Cough* Clinton *cough*) and
b. They are a major(if not the foremost) consumer of American debt. Dubya can't run his tax cut and spend government without them, so the US doesn't really make any challenges to them in the WTO.
Re:Business ought to be left alone (Score:3, Insightful)
You're exactly right, when no-one is being harmed! There's a very good reason for the gummint to meddle in this affair though: national security. You guys (ie: America) have a lot of tight restrictions on export of technology to try to keep a lid on The Bad Guys(tm) advancing their technology too quickly and becoming more of a military threat than they might otherwise be.
Now I'll admit that it only takes a bit of industrial espionage to take the lid off a lot of secrets, but that doesn't mean you should hand the blueprints for everything over, no questions asked.
I, for one, would be a damn sight happier if y'all would stop pissing about with nail files in carry-on luggage and concentrate on stuff, like this, that actuallymatters.
Re:Business ought to be left alone (Score:5, Insightful)
More likly Microsoft reads slashdot too and is worry about IBM having more power in the linux market in China so Bill called his friends in the White house and Justice department.
Re:Hidden Agenda ? (Score:5, Insightful)
IBM support is not going anywhere. It's profitable and has a very high reputation. The main concern on the IBM side is whether or not Lenovo will stay with IBM after the transition period.
Dell does not sell IBM ThinkPad computers. The only thing I can imagine you are talking about is some kind of really screwy deal where Dell salesmen are playing some kind of marketing middleman game. Of course, in that case, I can quite well understand why it would be in Dell's interest to foul things up as long they thought they could blame it on someone else. That would also explain the rolling heads, come to think of it.
Re:Business ought to be left alone (Score:4, Insightful)
Re:Business ought to be left alone (Score:2, Insightful)
Yes, until they decide to get mad at Taiwan and invade. And because they now have many of our tech resources and capabilities, they could slap us down one way or another if we decide to take the wrong side. Like saying they won't hold anymore of our debt, which could lead to our dollar spiraling downward and worth less than a peso.
Not to mention all of the human rights issues that China has (or lack thereof more specifically). They should never have gotten Most Favored Nation (MFN) status because of this.
Make no mistake, the Red Menace could prove to be alive and well someday.
free market is just a slogan. (Score:1, Insightful)
Re:Business ought to be left alone (Score:5, Insightful)
Re:We will see what China has to say about this (Score:3, Insightful)
Wouldn't it be something that the Chinese would like to avoid at all costs..a tax hike for the largest consumer market for their products will be like a tariff on their exports.
Re:Copyright Laws (Score:2, Insightful)
Re:We will see what China has to say about this (Score:3, Insightful)
Could this scenario happen? It could, if the government officials keep the country running like this for a while, and do not screw it with political unstability, and we would be able to see some new rules set by China. I'm not saying it's good or bad (although I do hope this would happen very soon), but that'll be interesting to see.
Whether the US like it or not, China is going to play the rules in the US's court now. Although the chinese companies are still very small, compared to the american/european/japanese ones, but we had seen this kind of situations change in about 10-15 years time. So, when the chinese companies grow big enough, they'll look to acquire some oversea asset (for any purpose, even just for diversification).
Whether you like it or not, this is capitalism. I'm crossing my fingers.
Re:Business ought to be left alone (Score:3, Insightful)
I didn't think so.
Of course, at least the people held in guantanamo bay - against their will and without any legal proof of wrongdoing - are still alive. Unlike the (conservative, peer-reviewed estimate of) 100,000 dead people caused directly by the invasion of iraq - the vast majority of whom had done nothing wrong.
You Americans and your blatant hypocrisy make me want to puke.
The biggest menace in the world at the moment is not just red; it's red, white and blue.
Re:Why IBM need to sell (Score:1, Insightful)
Two reasons. Risk, and return on capital.
First, risk. Looking at it simplistically, they spent nearly $13 billion to make slightly closer to $13 billion. A small increase in costs, and suddenly they're spending $14 billion to make $13 billion. And hardware costs have a history of being unpredictable - taiwan earthquake, maybe, and it's a big loss next year.
As for return, software group only needs to spend $10 billion to make $15 billion, so why spend that other $13 billion on hardware when they can spend it on something with a reasonable margin?
Re:Business ought to be left alone (Score:5, Insightful)
"Made in China"
Whether or not IBM sells its PC business to Lenovo, the technical information is already in China as is the actual manufacturing. So if our "national security" concerns are about the transfer of technical knowledge then it's too little-too late. If the concern is about having our important technology manufactured by a potential adversary, then it is also too little-too late.
This looks more like meddling for the sake of flag-waving to me...
Re:We will see what China has to say about this (Score:2, Insightful)
Anyways, if these doomsday prediction of China gaining control over the US by owning enough of its debt ever came to pass, the US always has one major trump card, we can at any time invalidate all those US treasury bonds and they become nothing more than scraps of paper.
Yes, but the US government could probably say goodbye to being able to borrow money for a long while. Do you think that anyone would trust their finanical promises after an action like that?
Re:We will see what China has to say about this (Score:4, Insightful)
The US could devalue (could?!?) its currency, effectively shrinking the value of those IOUs (I mean bonds). In an extreme case, it could simply not pay and tell them to sod off; Russia and Argentina have done this before and got away with it.
Could msft be behind this? (Score:3, Insightful)
The move by IBM to somewhat re-invent the PC, starting in China, is msft's worst nightmare. A move like that could eventually make linux a serious contender against windows. Let's face it, right now linux has about 2% of the desktop market, and is largly ignored by major software developers like intuit, adobee, and autodesk.
Msft is certainly not above abusing the USA legal, or political system, in order to maintain msft's market position.
Long Term cost of devaluation (Score:5, Insightful)
As a result, US Debt is considered 0-risk. It is the ONLY debt instrument in the world that is considered zero risk. Even other government debt has a small implicit risk premium in it.
Right now, the US raises money at no risk premium. If the US defaulted or increased the money supply (which would cause massive inflation and force the markets to devalue its currency... devaluation as policy requires a peg, normally to the dollar), the would cause the US to start paying a risk premium.
All of a sudden, you would have 10%-15% inflation from oversupply of money, and the US risk premium going up to 5%, for example, and now government bonds pay 15%-20%... How much do you think that your mortgage needs to be now? 25%, 30%?
Basically, the US CAN get out of its mess with massive printing of money, but the results would be catastrophic.
HOWEVER, your comment about the bank is 100% on, and I believe it is the current financial strategy. Continue to buy products from China for "worthless" sheets of paper (paying 4%-4.25% interest), then slowly increase the money supply and inflation to 4.5% or 5%, and inflate your way out of the mess. All of a sudden, the money is devaluing faster than your interest payments, tax revenues go up, and debt repayment is less painful.
Many countries played games like this, but it is normally to buy capital goods and other means of production... we've used it for consumer spending, which is why we may be in a bind.
Mild inflation is nice, but reasonable (5%) inflation) wouldn't kill us, and might be a way out of our mess.
Alex
Re:Business ought to be left alone (Score:3, Insightful)
It really irritates me when people try to pretend like the Chinese, Libyans, Syrians, etc are suddenly beyond reproach because the US has committed some actions like theirs.
So yes, the US has human rights violations and yes, the US has invaded a sovereign nation for a lie. But that does not remove the stain of such actions on any other nation that has committed them. The recent actions of the US do not change the fact that China has a recent history of civil rights abuses and unjust wars.
When all is said and done there remain pragmatic reasons for the US to distrust China. No "yellow peril/red menace", just a nascent world power with massive natural resources, a highly regimented social order, anger over victimization during colonialism, and a population that is 1/6 the entire world.
Re:Business ought to be left alone (Score:1, Insightful)
We of course have the right to say anything we want, but why would other countries who perceive the hypocrisy listen to us? This is why we need to get our own house in order first before we have any sort of moral authority.
That is the biggest problem I have with what the current administration is doing. Yes, attacking another country under false pretenses is bad, and yes deficits are bad, etc. but the worst thing that is happening is we are steadily losing our moral, financial, diplomatic authority over the world. Countries loving/hating us is nothing new, but what is new is the steady erosion of respect they have for who we are and what we are doing.
As the Chinese economy keeps growing in double digits and our dollar keeps sinking and debt keeps rising, we become increasingly irrelevant as a world power. But hey, as long as we keep gays from marrying and evolution from our schools I guess everything will be hunky dory.
Re:Laissez-Faire? (Score:2, Insightful)
You make a good point about it being market driven, but the way China currently treats IP, Western corporations won't be around long after Chinese knock offs have driven them out of the market.
Re:Business ought to be left alone (Score:2, Insightful)
I happen to hail from England - I have many of the same criticisms of our our own government and policies. I could go on about how we invented concentration camps (in north africa IIRC) and we were also the first to use chemical weapons on the prople of the middle east - I think under Churchill. We also engaged in an illegal immoral foreign war although with less fervour than the USA and some of our own troops abuses in Iraq are currently coming to light - through courtmatrials and legal procedings that we are obliged to carry out in order to honour the geneva convention I may add.
Chinaman Square? Do you mean the Tiananmen protests in 1989? If you can't spell it put any old phonetic spelling into Google and it'll help
Freakin heathen commies, you make me sick.
I'm not a commie but my political views are rather left of the norm for the USA (in many respects right of the norm for the EU though). In some ways I'd describe myself as a capitalist humanitarian libetarian - although those views often conflict
I am however a proud heathen (to virtually any organised religion) as my views are agnostic.
As for your sickness, I don't think that's got much to do with me, more with your own difficulty in accepting a world view that isn't consistant with your own and challenges some of your preconceptions.
I would like to add that my political views are entirley my own, formed through research, debate and observation and are also open to change through an open, honest informed debate - can you step up to the challenge?
Re:Hidden Agenda ? (Score:3, Insightful)
Re:Business ought to be left alone (Score:3, Insightful)
Speaking as an American... Many of us hold the same opinion as the rest of the world. We don't all approve of the war in Iraq. We don't all approve of Bush. Hell, a lot of us are absolutely disgusted with what's going on. Unfortunately, it's not like we can do much. Protest? Those don't do much. Rebellion? Yeah, that'll work... We're not all hypocritical; just some of us.
Re:Business ought to be left alone (Score:3, Insightful)
Obviously, I'm not going to argue that the U.S. is the pinnacle of morality, because it isn't. America's human rights record is vastly better than China's, and they're not even in the same league.
If you want to discuss real oppression, talk to someone like Harry Wu [worldnetdaily.com], a Chinese-American man who I've heard speak. He was forced into the lau-gai, which were slave labor camps operated by the Chinese that still exist today. Or talk to members of Falun-Gong. China's government is much, much worse in terms of human rights violations than America'a.
Re:MICROSOFT ought to be left alone (Score:3, Insightful)
It is funny though because I remember MS selling their source code to the Chinese government and then claiming during their anti-trust case that they couldn't reveal source code for "national security reasons".
I guess it is OK for the Chinese government to have access to the MS source code, however if anyone else can see it, it would "undermine" national security.
Re:Business ought to be left alone (Score:3, Insightful)
No offense, but there is nothing Insightful about this post. Exactly what "great knowledge" would China gain by buying this PC division?
These are basic PC's! There are no great government technologies hidden in the IBM PC division.
Oh, please. How is China harming the USA? Should we as Americans turn into nothing but fighters that try to destroy anyone that competes against us?I am a former U.S. Marine I served during the Gulf War. I am so tired of the typical American response to fight or kill any opponent. I hope that we (the USA) can wake up on day and actually work within the world.
What I fear as a former U.S. Maine is that one day the world will get tired of the US pushing them around. We (the USA) are are one bad-assed nation, however if the world tried to take us on, they would kick our @sses.
I have a very novel idea for the USA government. Why don't we try to work with the rest of the world, especially Europe, instead of always trying to fight them?
Re:Business ought to be left alone (Score:1, Insightful)
From my perspective, there are a lot of people repeating the media's sensationalist view that we aren't abiding by the Geneva Conventions...but if you even read a summary of the rules, you'll notice a few key points:
* The only people given "rights" are soldiers and official forces in uniform representing a country at war. Additionally, guerillas are protected ONLY if they are easily distinguishable and separable from the civilian population and have a distinct chain of command.
i.e. "In order for the distinction between combatants and civilians to be clear, combatants must wear uniforms and carry their weapons openly during military operations and during preparation for them."
* Feigning death in order to surprise and kill an adversary is punishable by death.
* Houses of worship used as activity centers for wartime activities lose their protected status.
* Any forces that do not fight by the rules of war automatically lose protected status (if they already had one).
i.e. "Combatants who deliberately violate the rules about maintaining a clear separation between combatant and noncombatant groups -- and thus endanger the civilian population -- are no longer protected by the Geneva Convention."
Also note that mercenaries ("soldiers who are not nationals of any of the parties to the conflict and are paid more than the local soldiers") are not given any protection...
Think all of those "POWs" are simple Afghans or Iraqis? I doubt it. It's a well known fact that many terrorists and "fighters" in both nations originated in other Arab and predominantly Muslim countries.
Read the news. Buried in the stories are the parts where U.S. forces discovered large-scale weapons caches in mosques, where coalition forces were fired upon from the mosques themselves...
Oh, and how about the part where a terrorist feigned being dead and then pointed his gun at a Marine, who promptly shot him?
Oh, and how about the part where groups of combatants in civilian clothes opened fire on coalition forces? Or maybe the part where illegal combatants (terrorists) held up a white flag, pretending to surrender, before opening fire on coalition forces once they had gotten closer?
How much more will it take? Has the U.S. done some immoral and ethically questionable things? Yes. But, so has everyone else. I realize this doesn't justify some of our mistakes, but I don't understand the undue focus on American mistakes when significantly less attention is paid on what these terrorists do on a regular basis.
So far, the U.S. has a pretty good track record in both Afghanistan (largely forgotten by now) and Iraq. I've seen reports from military personnel (speaking on their own, not on behalf of the U.S. government) and they're totally different from what the media reports.
From what the media would have us believe, dear God, the war is far worse in Iraq than it really is. Remember, the media wants to sell papers, advertising space, whatever...so they'll make it as sensationalist as possible, and positive optimistic news doesn't sell. Violence and sex and torture and rape sells, though.
Keep this in mind. The U.S., although it's far from perfect, isn't such a bad place (nor does it have such a bad government).
Re:Business ought to be left alone (Score:2, Insightful)
Nations do not function as moral individuals.
There has not been a powerful nation in HISTORY that abides by your perverse view of pragmatic statecraft. Nations represent tribes, seperate, and competing. Only until VERY recently has this concept of soft hearted foreign policy been entertained.
It is not the responsibility of an individual nation state to ensure the well being of other nations or their citizens. However, it may well be in their best interests. If you think that standing up for utopian ideals is a legitimate interest for a nation to exercise, please elaborate. Until that time, I cannot see how the practice of giving competing nations an advantage is going to benefit the citizens of the United States, or ANY nation that chooses to do so.
Pragmatism and greed are what drives the machinations of the world, there is no room for idealistic humanism when the future of the nation is on the line. That's not to say there are practical limits, but it is still entirely a matter of cost vs benefit. Obviously another holocaust is not beneficial to anyone, including the antagonist nation.
Look at history for your sample. Speak of a time where nations, empires, or kingdoms ever practiced statecraft according to your standards. It has not happened, nor will it ever happen so long as we are divided into seperate economic and political entities. If you bring up unificiation as the answer to this problem, you'd be wrong. Environmental, cultural, and economic diversity prohibits a unified political system. Economic concerns above all eliminate this possibility, as currency would no longer be useful as a tool for adapting an economy to a particular market.