IBM To Move Asia-Pacific Headquarters To Shanghai
Attracted by Shanghai's growing potential as a regional
headquarters, IBM has announced plans to move its Asia-Pacific
headquarters from Tokyo to Shanghai.
The move was announced internally by Frank Kern, the
company's Asia-Pacific president, in a company conference
call made on January 6. In the call, Kern announced that
IBM would transition its Asia-Pacific functions from Tokyo
to Shanghai. A company spokesperson said that the move
was made because the company is optimistic about Shanghai's
growth potential.
Under IBM's structural organization, while the company
currently has its regional headquarters in Tokyo, there
are some corporate functions in Singapore, Hong Kong and
Australia which are not managed from its Tokyo regional
headquarters. Because of the rapid growth of China's financial
sector, some related Asia-Pacific functions are already
based from Shanghai.
While IBM does not break out China figures in its financials,
the company has shown rapid growth in purchasing from
China. In 1993, the company bought US$30 million from
China; by 2000, this had grown to more than US$2 billion.
In July 2003, the Shanghai municipal government issued
a new law to promote the establishment of Shanghai as
a regional headquarters. It encourages businesses with
capitalization of more than US$400 million, and investments
in China of more than US$30 million to set up their regional
headquarters in Shanghai. In return for their investment,
the Shanghai municipal government will offer special incentives,
especially to hi-tech companies. These include special
benefits for locating in Pudong, employee training, import-export
operations management and tax-free status in certain areas.
IBM first came to China in 1937, and set up its regional
headquarters in Shanghai in that year. It did not re-enter
the People's Republic of China until 1992, setting up
its own wholly-owned foreign enterprise (WOFE) in Beijing
in that year. This was the first WOFE set up in China,
and has the number "001" on its license from
the Chinese government. In 1993, it set up separate companies
in Guangzhou and Shanghai.
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