Half cocked.

Imagethief was faintly depressed to read this week (BBC link - blocked in China) of calls for an inquiry into the sale of Lenovo computers to the US State Department to ensure that the PCs aren't being used to spy on America. Lenovo, you may have heard, is the Chinese computer manufacturer that recently bought IBM's ailing PC division, and which is partially owned by the government linked Chinese Academy of Sciences.

You probably have not heard of the US-China Economic and Security Review Commission (USCC), the organization currently squawking about the deal. The a panel of congressional appointees whose job is to:



...monitor, investigate, and submit to congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.
I certainly hadn't heard of them until this news broke. But you learn something new every day. Today, besides learning of the existence of the USCC, I also learned that there is virtually no limit to the depths of idiocy we are prepared to go to in the name of paranoid, insular protectionism and counter-productive anti-China hysteria. This can be added onto the recent Dubai ports fiasco and the earlier CNOOC-Unocal debacle from last year in America's growing list of panicky over-reaction to foreign acquisitions.

Have we become a nation of desperate paranoids, or is this simply business lobbying gone horribly wrong? America risks becoming the global equivalent of the rich but crazy neighborhood guy who lives in a huge house with an ugly dog, and who yells at the neighborhood kids and keeps all the baseballs that go over the fence.

There are two things which make the anxiety over Lenovo look ridiculous to me. First, so many PC components are manufactured in China, that, if the Chinese government wanted to stealthily infiltrate evil technology into the US they could do in Dells and HPs as easily as they could with Lenovos. And with arousing far less suspicion. Honestly, if you're going to paint the Chinese as villains, at least have the common courtesy to paint them as competent villains, and not the Snidely Whiplash of global espionage. As the Daily Tech website points out:
A top tier motherboard manufacturer spokesman spoke to us off the record claiming the Lenovo probe has "foreboding" implications.  If US companies are intimidated by probes of the USCC, such probes could be easily applied to virtually every PC manufacturer in the US: Intel motherboards are built by Taiwanese Hon Hai Precision Industries from facilities in Shenzhen; Acer components are built by component manufacturers in Shanghai; Dell PCs are assembled in factories in Suzhou and Shanghai.  The same spokesperson went on to say "We [Taiwanese manufacturers] do more work in China than we do anywhere else in the world. I don't even want to think about what would happen to our US clients if we got a USCC probe.
Need we add that even sexy Apple iPods are assembled in Shenzhen? They could be beaming subliminal, communist messages into your teenager's skull right now! Act fast if you don't want him or her to become some kind of homicidal, commie robot when the secret activation signal is given via triggers hidden cartoons animated in China!

Back to reality. Second -- and this is where the PR comes in -- can you imagine the consequences for Lenovo if they were actually discovered to be complicit in such a plot? Remember, this is a listed company traded in the US as an ADR. How's this for starter consequences:
  • Their reputation --such as it is-- would be utterly destroyed.
  • They'd never have a foreign sale again.
  • They'd be banned permanently from the world's largest PC market.
  • Their senior American management (including their CEO) would risk indictment.
  • All chance of them rising to become a global brand would be ruined forever.
This last point is important. China desperately wants some of its companies to rise to global champion level. This is a question of pride as much as it is one of economic success. Lenovo is one of very few Chinese companies that currently has any reasonable shot of achieving this kind of prominence. It seems unlikely that the Chinese will risk torpedoing that completely and casting suspicion upon all their other international companies. And the consequences above are only the ones for Lenovo. Imagine the consequences for other Chinese companies --state-owned or otherwise-- were they found to be stalking-horses for Chinese government espionage.

People raising a fuss in the US know this, so I was pleased to see CNN International's Hugh Riminton asking a USCC spokeswoman this morning if this was simply a case of "Reds under the beds". Maybe, but more likely this is about good, old-fashioned populist politics and protectionism, as misguided as that is in an industry where virtually all the manufacturing is done in China and Taiwan, regardless of where the brand on the hood comes from. ZDNet's Dan Farber writes:
Is this part of some fair trade deal? Is the Chinese government buying Dell systems to help boost the U.S. economy? Don't think so…but here's a catch. The government deal was made with CDW Government, a major U.S. distributor and integrator of PC systems, who must have a preferred distribution deal with Lenovo. Will Congress force CDW to swap out Lenovo for a U.S. vendor, just as it scuttled the potential purchase of Unocal oil by a Chinese firm last year? As news.com's "Silicon Money" special report indicates, technology and politics are becoming more tightly bound–with tech lobbyists raking in nearly half a billion in fees over the last six years…
That report he links to, by CNET's Declan McCullagh, is interesting reading, by the way.

Now, Imagethief isn't completely naive. Companies have been suborned to espionage before, and the Chinese government certainly spies on America (as we do on them). But you would expect such espionage to be carried out in unobvious, hard-to-detect ways unlikely to risk the commercial fortunes of your most successful companies.

Meanwhile, just to be safe, best to limit your iPod listening hours.