BEIJING - After two days of losses, the Hang Seng Index saw some sunlight Wednesday, closing up 0.3% to 15,659. On the mainland, the Shanghai Comp likewise advanced, adding 0.4% to close at 1598.

China shares were mixed in Tuesday New York trading.

Tom Online

( TOMO) dipped 4.2% to $17.70, but

Sina

(SINA) - Get Report

gained 0.6% to $23.01 and

NetEase

(NTES) - Get Report

was up 1.3% to $20.31.

Also in New York, shares of Hong Kong telecom operator

PCCW

( PCW) jumped 6.4% to $6.50 Tuesday on reports of a potential acquisition of its telecom and media arms.

Wednesday morning in Hong Kong, trading in PCCW shares was suspended pending an announcement related to a "possible transaction," according to a company statement. So far, PCCW has stayed mum amid a spate of press reports on possible bidders and counter-bidders. The company itself has said only that on June 16, a third-party firm expressed interest in acquiring its telecom and media assets.

The Wall Street Journal

said Wednesday that U.S. private-equity firm Texas Pacific Group and its Asian investment division, Newbridge Capital Inc., were likely to join in bidding for the assets, following on a Tuesday report that Macquarie Bank of Australia had already made an approach.

But opposition from fixed-line provider

China Netcom

(CN) - Get Report

, which owns a 20% stake in PCCW, could complicate efforts to acquire the company. Tuesday night, China Netcom issued a statement opposing the sale of key assets at PCCW.

In the online search market in China,

Google

(GOOG) - Get Report

now ranks an unimpressive third in market share, according to Beijing-based research firm Analysys. In the first quarter of 2006, Google held 13.2% share, behind

Yahoo's

(YHOO)

21.1% and top-ranked

Baidu's

(BIDU) - Get Report

43.9%.

Though China's online search arena is now valued at a mere $37.9 million, it's attracted lots of interest for its growth prospects.

Analysts said Google has lagged in tailoring its service to the local market, citing shortcomings in adapting for language and developing sales channels.

In a more recent setback, earlier this month both the flagship search site and Google's email service, Gmail, grappled with

serious service malfunctions in China and were inaccessible to many users in Beijing..

At its analysts meeting in New York on Monday, Chinese PC vendor

Lenovo

(LNVGY)

outlined goals to expand beyond emerging markets, move into the small and medium-sized business market, and boost brand recognition outside China. Shares have been under pressure as the company has struggled over the past few quarters, following its high-profile

acquisition of IBM's PC division last year.

At least on its home turf, Lenovo can claim a No. 1 ranking in PCs. What does it take to get to the top spot in China? Think massive distribution network -- in Lenovo's case, a total of 6,500 retail stores and 5,200 commercial resellers.

An interesting tidbit for

Dell

(DELL) - Get Report

watchers, by the way: When analysts were asked about Lenovo's channel strategy, management indicated it wants to sell through both direct and indirect channels.

If you'll recall, Lenovo is now headed up by the former chief of Asia-Pacific operations at Dell, which lives and dies by the direct-sales model.

As Moors & Cabot analyst Cindy Shaw wrote, "This suggests to us that Lenovo president and CEO Bill Amelio -- who left Dell for Lenovo less than a year ago -- believes that not all customers want to purchase PCs via the direct model." Especially not all customers in Asia.

Though Shaw believes Lenovo has plenty of work ahead, she added that the company is emerging as a "formidable No. 3 in PCs that bears watching vis-a-vis Dell and

Hewlett-Packard

."