Lenovo's Foreign Affairs

When China's Lenovo Group purchased IBM's (IBM) PC division a year ago, the deal looked like a pioneering step in a new era of cross-cultural business collaboration that might bring China and the U.S. closer. Now, even with Chinese leader Hu Jintao here visiting government and business leaders, the two countries seem as far apart as ever. There's friction over Iran, Taiwan, software piracy, and trade. And Lenovo is in the no man's land in between.

The political predicament is on the mind of Lenovo Chairman Yang Yuanqing. Yang, who moved to the U.S. last year to be near Lenovo's new headquarters just north of New York City, vented his frustrations in a recent interview with BusinessWeek Online. He was responding to a hail of criticism that greeted news last month that the U.S. State Dept. had bought 16,000 Lenovo PCs for use in offices worldwide.