Capitalism with Chinese Characteristics: Entrepreneurship and the State

by Yasheng Huang

The father of Liu Chuanzhi, the main founder of Lenovo, ran China Patent Agent based in Hong Kong. China Patent Agent was a major shareholder of China Technology. Computer manufacturing is capital-intensive and requires substantial investments. It was the capital market in Hong Kong that met this high level of capital requirements of Lenovo. In 1993, Hong Kong Lenovo went public on the Hong Kong Stock Exchange. The initial public offering (IPO) raised US$12 million, which the firm plowed back into its investments in China. Lenovo is a success story of the market-based finance of Hong Kong, not of China's state-controlled financial system.