IBM’s CEO visits China for trust-building talks

A slide in IBM Corp's sales in the Chinese mainland amid a broad backlash against claims of US government spying has triggered a rare visit to China by CEO Ginni Rometty.

The head of the world's biggest technology services company arrives in Beijing on Wednesday for three days of meetings with government leaders, according to people familiar with her visit.

The visit comes as US firms like IBM and Cisco Systems Inc seek to restore trust with Chinese regulators and reverse slumping sales.

Chinese central government has encouraged State-owned companies to buy local-branded products since last year's revelations by former National Security Agency contractor Edward Snowden of spying. That has undercut business at some US-based multinationals operating in the world's second--biggest economy.

In Beijing, Rometty will have meetings with Chinese officials including Vice Premier Wang Yang, responsible for helping to formulate China's economic policy.

The IBM chief also is expected to meet officials from the Ministry of Industry and Information Technology, and top State-backed customers.

The precise agenda for the meetings couldn't be ascertained immediately.

"IBM doesn't talk about or confirm our executives' travel plans," said New York-based company spokesman Edward Barbini.

Though IBM books only about 5 percent of its sales in the Chinese mainland, it has been operating there for 30 years, tapping into the country's rise as an economic power.

The mainland sales fell more than 20 percent over the second half of last year, dragging down the company's emerging markets business overall.

It's an unwelcome distraction for the Armonk, New York-based firm as it continues to embrace higher-margin software and technology services while moving away from hardware.

Last month, IBM agreed to sell its low-end server business to Lenovo Group, the Chinese firm that acquired IBM's ThinkPad business nearly a decade earlier.

The $2.3 billion deal was struck at about one-half the reported asking price a year earlier, after the low-margin server business posted seven quarters of losses as clients moved to cloud computing.