Hewlett-Packard Co. has just sold a majority stake in its Chinese server and storage business to Tsinghua Holdings Co. Ltd., after launching a joint-venture the company hopes will boost sales of its hardware products in the country.

Tsinghua will take a 51 percent stake in the joint venture, to be called H3C, for about $2.3 billion, The Wall Street Journal reported. H3C will consist of HP’s Chinese server, storage and technology services assets, and H3C Technologies Co. Ltd., a subsidiary of HP that sells networking equipment in China.

The deal comes just months ahead of HP’s planned split that will see its enterprise software and hardware, and PC and printing businesses become separate companies. That transition is expected to be completed by the end of this year, and will see the newly-formed Hewlett-Packard Enterprise take over enterprise-related hardware and software sales, with HP Inc. selling PCs, printers, mobile devices, monitors and accessories.

The WSJ speculates that the “increasingly testy” relationship between the U.S. and Chinese governments could be the main motivation behind HP’s decision to team up with Tsinghua Holdings. Sino-U.S. relations have deteriorated in the wake of Edward Snowden’s revelations of U.S. government surveillance, and U.S. accusations of Chinese hacking. In retaliation, China has reportedly began placing restrictions on U.S. technology firms, including banning the use of Windows 8 by government departments.

“In that light, the deal qualifies as an ‘if you can’t beat them, join them’ strategy that HP hopes will allow it to prosper despite continuing or rising geopolitical tensions,” said Charles King, principal analyst at Pund-IT, to The WSJ.

The move could potentially serve HP well, considering the prestige Tsinghua Holdings has in its home country. The company is affiliated with Tsinghua University in Beijing, one of the country’s most prestigious learning establishments, and HP is hoping the partnership will help H3C become a market leader in servers, storage and networking products specifically designed for China.

Any growth in China would be a timely boost for HP, which saw its global server sales grow by just 1.6 percent to $3.9 billion during last year’s fourth quarter, according to IDC. That’s in sharp contrast to China’s Lenovo Group Ltd., which saw its server revenue jump by 748.3 percent last year, in part due to its acquisition of IBM’s x86 server business. The server market in China is definitely a growth area however, as smaller ODMs (original design manufacturers) that make bare-bones servers and sell directly to Chinese customer saw revenue grow by 31.4 percent as a group.

H3C will command around $3.1 billion in annual revenues and will have around 8,000 employees, HP said. Its subsidiary HP China will retain control of enterprise services, software, HP Helion Cloud, Aruba Networks, printing and PC businesses.

The WSJ says the transaction should be completed by the end of the year, subject to regulatory approval and shareholder vote.