If you were looking for the perfect news story to illustrate the enormous shifts in our world, the purchase of IBM’s PC division by Chinese Lenovo is it.
I met the founder of Lenovo, Liu Chuanzhi, when it was a still-small Legend, created out of the computer science department at Beijing University. Now it has bought the PC business that infiltrated these machines into every corporation in the world. Of course the PC division of IBM has not been a major force for years, but the symbolism is there. The major Chinese companies are no longer content with their domestic or even regional markets. They intend to be global players.
At the same time, it’s a story of the complete commodification of the PC. IBM is absolutely right not to care a hoot about who makes, markets and distributes PCs. For most companies, it’s not a business in which to make money, or to create interesting new products.
Hidden behind the FT subscription firewall, Martin Wolf has an excellent analysis of the problems being stored up for the world economy by the current US imbalances.
|The challenge to the world is to wean itself off ever-rising US indebtedness sooner rather than later. Yet this is clearly not what the significant policymakers intend. Europeans may well moan. But US policymakers are happy with their aid programme from abroad, while Asian policymakers seem content to subsidise their exports to the US. The result is what Laurence [sic] Summers, the former US treasury secretary, has called a “balance of financial terror”, with both sides preferring continuation of the status quo to the risks of change. But the behaviour that is creating this balance is unstable, because the predicament is worsening. The world needs a credible plan for escape from its reliance on the US debt trap.|
Stay tuned for Martin’s plan next week. (Pedant’s point: Incidentally, you’d expect FT subs to know that Larry Summers is a Lawrence, not a Laurence. Does he look like a Laurence? No way.)