HP China unit sells 51% stake to Tsinghua University arm

Hong Kong

HEWLETT-PACKARD Co has given up control of its US$4.5 billion Chinese unit to try to change its fortunes after acknowledging twice this year that the performance of the business has been "disappointing".

Hewlett-Packard rallied 5.1 per cent in two days after posting higher-than-estimated earnings and saying that it will sell 51 per cent of its networking and server operations in the country to an arm of Beijing's elite Tsinghua University, the alma mater of Chinese President Xi Jinping. The company is betting that ceding ownership to the state-owned Chinese firm will help it boost sales as the government presses the country's banks, military and major enterprises to stop buying most foreign technology.