"This obviously is something we have been worrying about, " said Huang Ying, IBM China Research Lab associate director who leads one of the company's cloud computing projects in China.
Yet there was an unbridgeable gap between IBM and China's behemoths.
"China is very, very serious about becoming e-commerce-oriented in a few years, " says Cindy Cheung, general manager for IBM's Greater China e-business solutions group.
In a similar vein IBM will sell its personal computer business to China's Lenovo Group because IBM can make more money on things like consulting than on PCs.
In fact, at the time of the IBM ThinkPad acquisition, the China business was 37% of total Lenovo revenues, so the China sales out of the global revenues by Q4 fiscal 2009 had actually increased nearly 10%.
Now it wants to set the groundwork for the kind of rapid economic development people associate with Brazil, India, China and Russia, but which IBM and others believe can happen in many parts of the world.
Furthermore, IBM foresees big opportunities in growth market such as China and other rapidly growing Asian markets.
IBM, meanwhile, is setting up a unit in China with 400 employees to cater purely to the country's appetite for software and services to manage its rail network efficiently.
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The Wall Street Journal reported that IBM is deploying technology to help thousands of scattered hospitals in China standardize medical records.
And ThinkPads and ThinkCenters were made in China, in the exact same factories, even when IBM still owned the brands.
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When Lenovo bought the IBM PC division, the Chinese company sold pretty much just PCs in China.
The supply of old servers will come mainly from China as equipment leases expire and customers turn in old machines, IBM says.
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While the domestic portion of IBM's revenues grew just 2% in the last quarter, business in India, China, Korea and other parts of Asia grew 20%.
And in May, Lenovo, a firm with strong connections to China's government, had finalised its purchase of the PC-making arm of IBM.
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