IBM's CEO visits China for trust-building talks with govt leaders: sources

Wed Feb 12, 2014 2:24am EST
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By Matthew Miller

BEIJING (Reuters) - A slide in IBM Corp's (IBM.N: Quote) sales in China amid a broad backlash against claims of U.S. government spying has triggered a rare visit to Beijing by Chief Executive Officer Ginni Rometty.

The head of the world's biggest technology services company arrives in China's capital on Wednesday for three days of meetings with government leaders, according to people familiar with her visit. The visit comes as U.S. firms like IBM and Cisco Systems Inc (CSCO.O: Quote) seek to restore trust with Chinese regulators and reverse slumping sales.

Beijing has encouraged state-owned companies to buy China-branded products since last year's revelations by former National Security Agency contractor Edward Snowden of spying. That has undercut business at some U.S.-based multinationals operating in the world's second-biggest economy.

In Beijing, Rometty will have meetings with Chinese officials including Vice Premier Wang Yang, responsible for helping to formulate China's economic policy. The IBM chief also is expected to meet officials from the Ministry of Industry and Information Technology, and top state-backed customers.

The precise agenda for the meetings couldn't be ascertained immediately.

"IBM doesn't talk about or confirm our executives' travel plans," said New York-based company spokesman Edward Barbini.

Though IBM books only about 5 percent of its sales in China, it has been operating there for 30 years, tapping into the country's rise as an economic power. China sales fell more than 20 percent over the second half of last year, dragging down the company's emerging markets business overall.

It's an unwelcome distraction for the Armonk, N.Y.-based firm as it continues to embrace higher-margin software and technology services while moving away from hardware. Last month, IBM agreed to sell its low-end server business to Lenovo Group Ltd. (0992.HK: Quote), the Chinese firm that acquired IBM's ThinkPad business nearly a decade earlier.   Continued...

Visitors walk past the IBM booth at the 9th China International Software Product & Information Service Expo in Nanjing, Jiangsu province September 6, 2013.REUTERS/China Daily