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The USCC launched a probe against Lenovo, but many wonder if the accusations are warranted

The United States government is planning to spend roughly $13M USD on computers from Lenovo. The company, famous for buying up IBM's PC manufacturing arm, is working on a deal with the US government to produce roughly 16,000 computers. Just recently, the U.S.-China Economic Security Review Commission (USCC) has requested that Lenovo be probed for any concerns about possible spying, eavesdropping or worse.

The supposed problem presented by the USCC is that the 16,000 computers are being built by a Chinese-mainland company.  The USCC argues that a foreign intelligence like that of the Communist Party of China (CPC) can use its power to get Lenovo to equip its machines with espionage devices. Lenovo has strongly declined that it is involved in any such activities.

Many analysts would call these probes are excessive and knee-jerk.  When manufactured under IBM, almost all Lenovo PCs were built in the People's Republic of China and the Republic of China (Taiwan) to some degree or another anyway.  Of the top 10 system builders in the US, eight have some component manufacture attributed specifically to ECS-Tatung, at Taiwanese corporation that only assembles exclusively in the PRC.  Of the other two not represented by ECS-Tatung, Dell and Apple, Dell has a strong reliance on ASUStek -- another company that builds exclusively in the PRC. 

Despite the probe, Lenovo says that its international business, especially those that deal with the US, follow strictly laid out government regulations and rules. Lenovo also claims that even after purchasing IBM's PC division, its international business has not been affected negatively. Interestingly, in an interview with the BBC, Lenovo mentioned that an open investigation or probe may negatively affect the way that the company deals with future government contracts or bids. The Lenovo representative did not explain details on exactly what negative implications would occur if there were future investigations. The 16,000 PCs to be built for the US government are actually assembled outside of China in Mexico, Taiwan and Raleigh -- an oddity in the PC manufacturing business.

A top tier motherboard manufacturer spokesman spoke to us off the record claiming the Lenovo probe has "foreboding" implications.  If US companies are intimidated by probes of the USCC, such probes could be easily applied to virtually every PC manufacturer in the US: Intel motherboards are built by Taiwanese Hon Hai Precision Industries from facilities in Shenzhen; Acer components are built by component manufacturers in Shanghai; Dell PCs are assembled in factories in Suzhou and Shanghai.  The same spokesperson went on to say "We [Taiwanese manufactures] do more work in China than we do anywhere else in the world. I don't even want to think about what would happen to our US clients if we got a USCC probe."

CDW Government, the company originally contracted to fill the orders for the US government also carries several brands that are assembled in the PRC including Acer, BenQ, D-Link, HP, Sharp and Toshiba. 



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RE: Lenovo/US probe
By masher2 (blog) on 3/31/2006 12:42:07 AM , Rating: 2
> "I guess you have no idea what an EEZ is."

I hate to embarrass you further, but this section of the UN Convention on the Law of Sea is relevant:

Article 58. In the exclusive economic zone, all States, [enjoy] the freedoms referred to in article 87 of navigation and overflight ...and other internationally lawful uses of the sea related to these freedoms, such as those associated with the operation of ships, aircraft and submarine cables and pipelines ...

In other words, within the EEZ of any nation, ALL OTHER NATIONS have full rights to passage by ship and submarine and overflight by aircraft. Without permission.

You should have realized this from the name alone...the EEZ is for the exclusive ECONOMIC use of the host nation. It and it alone can exploit the natural resources of the EEZ. But it cannot bar passage to any other nation.


"This is about the Internet.  Everything on the Internet is encrypted. This is not a BlackBerry-only issue. If they can't deal with the Internet, they should shut it off." -- RIM co-CEO Michael Lazaridis











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