Suddenly we turned to the consumer market

You have based your group in 1984, at the beginning of the Chinese opening, while private companies did not exist yet. You were then researcher at the Academy of sciences of China. How has it happened

Deng Xiaoping had to declare the transition to a market economy. But nobody knew how to. We were in an administered economy and legal system was completely unaware of entrepreneurs. We were mini-ministères by industries. For electronics, another for aeronautical or automotive, etc. Each of these departments was a shareholder of the companies in its sector. It was allocating quotas of production, employees and even the level of wages. At the time, these companies do decide nothing, they were in a cage. That's why I wanted to create my business for free. But the Academy of sciences had never done that and did not know how to proceed. Fortunately, its President had understood by visiting the United States that to transform technologies into commercial products, need to emerge from independent companies.

The implementation has been difficult...

Much more difficult than it is today. There were of course no great competition, but the situation was completely chaotic. We had an inadequate legal system to a market economy. We had for example developed an electronic card to write in Chinese characters. As they had been accustomed, the authorities imposed us a price corresponding to the price of equipment plus 20. It was obviously impossible, it is even not in any way the work of researchers. Of time, we have set our prices and we was immediately imposed a huge fine of 1 million Yuan. We had to negotiate to reduce it, but it has not been removed. It was like that. On another occasion, an individual have cheated us. It took me weeks to find. I was more able to sleep at night and I had to be hospitalized. All this is normalized with the entry of China into the World Trade Organization.

But it did enter the US competition. How do you have resisted the landing of HP, Dell and IBM

The Government has greatly reduced tariffs and import quotas because he was unhappy with the quality and the price of Chinese products. When the Americans arrived, the major groups of State collapsed almost by a stroke. The leader, Great Wall, sank in a year! We were still very small, with 2 of the market. We analyzed the situation of the market and we we are reorganized in depth. But we have virtually no government contracts and banks buying only American brands in which they had more confidence. Suddenly, we turned to the consumer market. And then we found our competitive advantage: the speed and the understanding of the needs. In this industry, the prices of the components are very volatile and drop in a few months. We shortened the cycle of production and manufactured small amounts to avoid any stock. Which allowed us to lower selling prices several times in the year. The Americans could not do because they had prior to refer to the headquarters in the United States, since the budgets were annual. And then we find tips. For example, in 1999, when the Internet took off, people had great difficulty with the hardware connection. Then, we negotiated with the local and integrated operators all equipment in computers. At the time, you could connect instantly with a click. With it, our market share increased by 7 points in a single year!

But, at a time, after the failure of an attempt to diversification, you decided to become a global company by buying the IBM PC in 2005. Why do you have preferred this solution rather than organic growth

The answer lies in two digits. The year of acquisition, our turnover was nearly $ 3 billion. Two years later it exceeded 16 billion. Our profits have increased from 140 million to 480 and our global market share from 2.2 to more than 7. It now exceeds 10. We need a brand, technology and skills. We have carefully analyzed the situation. The risks were three orders. The acceptance of the operation by customers, the motivation for international troops and the risk of a clash of culture at the branch level.

You encountered difficulties of integration at the beginning. What were the major cultural differences

For example, Lenovo, we used to respect scrupulously our commitments. It is a very important part of our culture. When people come to see me, they know that they will have to meet the objectives they provide and it is not acceptable that repeatedly it did not take his promises. In Western companies that we have observed, there is a certain culture of tolerance on the objectives that are given. Another example, in China, an employee does not see his superior to defend his skills and negotiate its powers. He works, observed, and then only defined with its tasks and even his salary. In the same way, it is common among us to come to apologize when it made a mistake, and is not an admission of weakness, while it is rare for Westerners who do not understand, for example, when I just apologise before my shareholder.

Relations between the companies are, also, different...

This is true. When the Academy of sciences opened the capital to investors that we knew well, they took 29 of the capital without the slightest audit, while we were in trouble. Conversely, after having negotiated the acquisition of the IBM PC, the Americans have mobilized lawyers for weeks on all small details which did not even represent the one-thousandth of our agreement. All these differences fade and, in the end, no leader is party and managers of all countries are more motivated today but they are more involved.

The activity of Lenovo is separated in two, with mature markets, on the one hand, and growth, on the other markets. Is it to say that you do not believe in the future growth of Europe or the United States

This distribution is not a Chinese view of the world. It is clear that these are emerging markets which derive several years growth in our sector. Nevertheless, mature markets are critical for Lenovo. Our portfolio of customers is very broad and we can sell products to higher value-added and greater quality. We can learn many things, which are useful for all of our activities. In General, the strategy of Lenovo is balanced. We are both mature and emerging countries, and professional and special markets. The acquisition of the IBM PC has strengthened business. But in recent years, it is the consumer segment that took great importance. Lenovo has extensive experience in this field in China, but less in more mature areas. We must therefore respond on this, while remaining strong in the "professional." This corresponds to the strategy of the group, that we called "protect and attack."

You are currently number four of the world market for the PC. How do you see the future of this market

I am not worried about the future of the PC, which will endure long. Remains that the current PC formats will enrich themselves, including through the development of mobility. With the Internet, people want to be connected everywhere in the street or in the aircraft. This background trend leads to evolve. We rely on our technological know-how to new products that will meet these new needs. We already launched a "smartphone", lineup, in China, which goes in this direction. Internet bars are also a market we are looking at. In the field of mobile Internet, we want to develop an integrated offering, with equipment, service and content. We are not satisfied our current position of number four world and, in the medium term, we want to be at the top.

President Hu Jintao is currently on a visit in Europe. What vision Chinese entrepreneurs have Europe

I can't speak for all Chinese entrepreneurs. Lenovo, Europe is an extremely important entity that represents a large portion of our revenues. This is why one of our leaders, following the mature markets, is based there and we are very attentive to its evolution. With regard to the France, it has numerous advantages in technology. Investment funds which I interested such as very close to the French expertise in water treatment, which represents a huge market in China. More generally, I think that Europe must find its way out of the crisis, as China has done with its massive plan of investment in infrastructure. It is a true success.