HP Joins IBM in Selling Off Server Tech to China

May 22, 2015 Updated: July 18, 2015

Hewlett-Packard announced Thursday it will sell more than half of its networking and server operations to the Chinese regime.

The sell-off mirrors a similar move from IBM, which finalized the $2.3 billion sale of its x86 server business to China’s Lenovo in October 2014.

Hewlett-Packard is faced with falling sales. According to Bloomberg Business, its revenue dropped $10 billion since July 2010.

“HP is making a bold move to win in today’s China,” said Meg Whitman, chairman and CEO of Hewlett-Packard, in a press release.

Part of the problem is the Chinese regime’s new restrictions on foreign technology vendors, according to Bloomberg Business. The Chinese regime is pushing its banks, military, and major companies to stop buying foreign technology.

Hewlett-Packard is giving up control of $4.5 billion business in hopes of staying in the Chinese market, to an extent. It is selling 51 percent of its networking and server operations to the country to an arm of Beijing’s Tsinghua University.

The Chinese regime started targeting U.S. businesses through propaganda and restrictions, in a tit-for-tat retaliation directly after the U.S. Justice Department indicted five hackers from the Chinese military on May 19, 2014. It has mainly used claims from former NSA contractor Edward Snowden about U.S. spying to vilify foreign technology firms.

The deal is expected to close near the end of 2015, according to the Hewlett-Packard press release. 

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