IBM will share technology with China and help build country's industry, responding to political pressure

IBM CEO Virginia Rometty said that the tech company will share technology with Chinese firms and will help the country to build its own IT industry.

She noted that this move is more important rather than viewing the country solely as a sales desstination or manufacturing base.

"If you're a country, as China is, of 1.3 billion people you would want an IT industry as well," the chief executive said on Monday. "I think some firms find that perhaps frightening. We, though, at IBM ... find that to be a great opportunity."

Rometty's shift of the company's strategy was the clearest acknowledgement to date that companies must adopt a different tack if they are to continue in China amid growing political pressure. The Chinese government has been pushing for the use of more Chinese and less foreign-made technology, to grow its own tech sector and in response to ex-U.S. National Security Agency contractor Edward Snowden's leaks about U.S. cyber surveillance. IBM's sales in China have stabilized after a steep fall that began in the third quarter of 2013 following Snowden's revelations.

A number of U.S. technology firms operating in China are forming alliances with domestic operators, hoping a local partner will make it easier to operate in the increasingly tough environment for foreign businesses.

The new strategy allows Chinese companies to build everything from semiconductor chips and servers based on IBM architecture, to the software that runs on those machines.

IBM said last week that Suzhou PowerCore Technology Co will begin producing a version of IBM's Power8 chip to run on Chinese-made servers. Its POWER line of processors is often used for intensive calculations in financial services, where Chinese banks have been required by new government regulations to use more domestic vendors, says Reuters.

The U.S. tech firm had already announced a series of partnerships with Chinese vendors and now packages its database software with products from Inspur, a server hardware maker and IBM rival, and has also struck agreements with Youyou, a Beijing-based software firm. Other firms are making similar efforts.

For instance, SAP SE Greater China head Mark Gibbs said in October the company sought to be a "complementary player to the Chinese market” by selling its software on hardware made by Lenovo Inc and Huawei Technologies.