Tea with Liu Chuanzhi

飞雪寒冰

He is particularly enthusiastic about Clyde Prestowitz’s Three Billion New Capitalists, a book about “the powerful yet barely visible trends that are threatening to end the six-hundred-year run of Western domination of the world,” according to its jacket. Mr. Liu says he has given the book to many friends and many government officials.



He’s not ready to give up on the PC business yet. When asked if the PC sales will become less important to Lenovo going forward, he gives an answer that belies his company’s origins in the state, which remains the company’s largest shareholder.



“If we set profit growth as a top priority, we might go down that path,” he says. “But if the shareholders have other requests, we might look into other opportunities. Say for example - this is not true - but supposes the shareholders want to tackle unemployment problems in China, and then we might develop more low-end products that can provide jobs but not be as profit-making.”




For now, he concludes, the board remains focused on profitability.

飞雪寒冰

Background:


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Liu Chuanzhi, was born in 1944 in Zhenjiang, Jiangsu province, son of a prominent patent attorney and the eldest of four children. He studied radar communications at the elite Xi’an Military Institute of Telecommunications and Engineering, now Xidian University and graduated in 1966 at the start of the Cultural Revolution.



Like most college graduates of those years, he was sent to work in the countryside. He spent six months on a farm on an island in Guangdong Province’s Pearl River delta and then another six months on a farm near Lake Dongting in Hunan province. He eventually won a coveted spot at the China Academy of Sciences’ Institute of Computing Technology in Beijing.



Mr. Liu describes his life as having had two distinct phases - before and after the creation of what is now Legend Holdings. “Many people experience gradual transitions in their lives,” he says. “Not many can bisect their life clearly into two parts, like mine.”



But his rise at Legend was not without its drama. In the mid-1990s he and one of the co-founders of the company, Ni Guangnan, differed over the direction the company’s technology should develop, setting the stage for a bitter power struggle. Mr. Ni accused Mr. Liu of financial misdeeds, accusations that threatened to land Mr. Liu in jail. After months of investigation, Mr. Liu was finally cleared by Legend’s board and in a tearful board meeting succeeded in having Mr. Ni removed as the company’s Chief Engineer.



Today, Legend Holdings has four businesses, Lenovo Group, the PC manufacturer, Digital China, an information technology services provider, Raycom Real Estate Development Co., Legend Capital and Hony Capital. The last two are fund management companies, with US$3.5 billion under management