This was done against a backdrop of change including the expansion of Chinese companies overseas, reforms to the domestic banking sector and the telecoms sector's migration to 3G.

Last week, the IT powerhouse announced its China strategy for the next five years in Beijing as it inaugurated its China business innovation centre, a window for showcasing its solutions tailored for six sectors: finance, telecoms, public service, medical and public health, retail and manufacturing.

The centre also houses a telecoms solution laboratory linked to the group's four telecoms solution laboratories in the US and France.

Henry Chow, general manager for IBM Greater China group, said that for the next five years IBM would focus on helping Chinese enterprises expand globally.

To achieve this goal, it expanded its research laboratory in China and established a systems centre last year for supporting Chinese firms' IT needs such as benchmarking, testing and training.

'Many have asked me if IBM is coping well with our China business after our sale of PC business to Lenovo,' Mr Chow said.

'I must say that the disposal has simply meant that we are not only leading in our systems, software and IT services businesses in China, we still have a presence in the PC [market] through our stake in Lenovo,' he said.

The company still has a 13.2 per cent stake in Lenovo after its US$1.75 billion sale last year.

IBM China employs more than 2,500 software engineers. There are about 200 scientists working in its software development and research laboratories, and they submitted about 200 patent applications to the Chinese authorities last year.

IBM's system centre in Beijing, which houses servers and storage equipment worth US$500 million, is the only performance benchmark centre located in Asia; the remaining four are located in the US, France and Germany.

Mr Chow said IBM China, which had branches in 18 mainland cities, would open four more offices in four provinces this year.

Peter Shen, vice-president of operations for IBM China, said this year the company would hire up to 2,000 people, adding to its team of more than 5,000.

The firm would focus on serving the telecoms and the public sector this year, after the emphasis on the financial sector last year.

IBM said that in 2004, business from its four emerging markets - China, India, Brazil and Russia - grew more than 25 per cent to overtake the US$4 billion mark.

Gartner analyst Annie Chung said that after the disposal of its PC business, IBM's China strategy had changed from a product focus to an industry focus through selling a suite of solutions and hardware according to industries' specific needs.

Last year, the company set up its business consulting division to advise companies on their business operations.

'It is now cultivating industry expertise ?so that it could sell its solutions and hardware with an industry focus. The research by its business consulting division could back up its IT software innovations team and [help it] sell more specific solutions to these industries,' Ms Chung said.