Cisco & Partners to Invest $10B in China

Cisco and its local partners said Wednesday they plan to invest $10 billion to support training, innovation, investment, R&D and job creation in China.

The commitment to "local innovation, national transformation, and support the growth of local economies and businesses" came in conjunction with meetings between Cisco Systems Inc. (Nasdaq: CSCO) chairman and CEO John Chambers, incoming CEO Chuck Robbins, Chinese Vice Premier Wang Yang and leaders of other government agencies in Beijing, the company said in a statement. (See Cisco Increases Investment in Innovation & Development in China.)

"Cisco signed a Memorandum of Understanding (MoU) with China's National Development and Reform Commission (NDRC) to expand investment in China, focusing on areas of innovation, equity investment, R&D and job creation, in order to promote the development of a high tech industry in China, while actively helping meet the country's long-term goal of innovation-driven development," the company said.

Cisco will also invest in training for information and communications technology workers, under an MoU with the Association of Universities (Colleges) of Applied Science (AUAS), established under the guidance of China's Ministry of Education, Cisco said. The vendor will invest in a four-year program with 100 educational institutions of applied sciences recommended by AUAS through the existing Cisco Networking Academy Program.

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Cisco cited Chinese government programs such as China Manufacturing 20205, Internet+ and its cloud strategy as drivers of growth in the country.

Cisco, which isn't new to China (it entered the country in 1994), faces tough competition from Chinese companies including Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763)

Earlier this year Cisco faced increased scrutiny from the Chinese government over security concerns, according to a Reuters report. Cisco was absent from the Central Government Procurement Center's list of approved vendors. Also missing from that list were: Apple Inc. (Nasdaq: AAPL), Citrix Systems Inc. (Nasdaq: CTXS), Intel Corp. (Nasdaq: INTC) and McAfee Inc. (NYSE: MFE). Reuters' sources attributed the omissions to either security concerns about Western cyber surveillance, or protectionism for China's own products. (See China, US Quarrels Could Get Ugly for Telecom.)

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— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected]

[email protected] 6/18/2015 | 6:17:31 AM
Who is counting? In several years' time, how can this $10 billion be quantified and qualified? Will details be released and accounted for?

I'm not saying that investments won't be made but it's a nice number, right?
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