IBM’s CEO Ginni Rometty arrives in Beijing later this week as she attempts to rebuild bridges in China following a loss of trust stemming from the worldwide fall out after US National Security Agency [NSA] spying revelations.
During her trip, Rometty will attempt to arrest a slide in sales by highlighting IBM’s commitment to local partnerships, future cooperation and information security in order to try and instil confidence in the US company’s operations.
She will arrive in the Chinese capital Beijing on Wednesday for a frenetic three-day trip that takes in meetings with various government leaders, according to people familiar with the itinerary.
Some of the officials that Rometty will meet with are vice premier Wang Yang, who is responsible for the country’s economic policy, as well as key officials from the Ministry of Industry and Information Technology as well as prominent state-backed customers.
Ever since revelations of spying by the NSA were revealed by whistleblower Edward Snowden, IBM, along with other reputable US firms, have been struggling in the Far East due to the Chinese government in Beijing urging state-owned companies to use home branded products.
The trip is the second made by a top IBM executive in the past few months after Christopher Padilla, head of governmental programs at IBM, hit the Far East back in November following the firm’s Q3 2013 results call.
At the time Padilla met with vice minister for commerce Wang Chao as well as officials from the Ministry of Industry and Information Technology, according to people briefed on the visit.
China is one place that IBM is over-reliant on hardware sales to state-owned enterprises with the sector accounting for some 40 per cent of local revenue whereas hardware sales worldwide account for just 15 per cent of revenue.
The US-based cloud computing industry, of which IBM draws revenue, is one that is expected to suffer after the NSA revelations with one think tank, the Information Technology & Innovation Foundations, stating that the industry could lose $35 billion [£21 billion] in worldwide sales over the next three years.