Cisco unveils more commitments in US$16b mainland investment

PUBLISHED : Thursday, 17 April, 2008, 12:00am
UPDATED : Thursday, 17 April, 2008, 12:00am

Cisco Systems, the world's largest networking equipment manufacturer, is delivering on its five-year, US$16 billion investment on the mainland.

The initiatives put the country at the centre of the company's internet and green research efforts, and promote technology entrepreneurs and manpower development.

'The next stage of our strategy for China reflects the country's importance to Cisco's global growth strategy and to our long-term business model, built upon next-generation innovation in collaboration and Web 2.0 technologies,' said Cisco chairman and chief executive John Chambers.

Cisco yesterday unveiled new and expanded commitments with the Ministry of Commerce, the National Development and Reform Commission, and Peking University that supports Cisco's biggest investment programme outside the United States.

'As we continue to evolve our innovation, education and sustainability programmes within China, we are also focused on our goal of making China one of the company's top three world markets in the next five years.'

Cisco's spending focus is expected to help grow business across new markets on the mainland where it competes with other multinational networking gear suppliers and homegrown rivals Huawei Technologies and ZTE Corp.

The US-based firm's memorandum of understanding with the NDRC aims to broaden and deepen co-operation in the areas of manufacturing and service outsourcing, next-generation internet, venture investment, training and development, and environmentally-focused research and development - including energy efficiency, emission reduction and network-based green urban development.

'In this critical period of economic transformation for China, it is important for our higher education institutes to learn about the experiences and resources of globalisation through working with an outstanding transnational enterprise like Cisco,' said Qi Chenyuan, deputy director-general of the NDRC's High-Tech Industry Department.

Under the memorandum between Cisco and the Ministry of Commerce, the company will work with the ministry to help implement the so-called Thousand-Hundred-Ten Project for the business process operations industry. Cisco will provide training to improve the skills of employees in select mainland firms.

Involvement in the ministry's project is expected to help Cisco transition portions of its global business process services operations to the mainland over the next three to five years.

Cisco is also investing US$20 million over the next three to five years to help Peking University create the 'Guanghua Cisco Leadership Institute', which will develop talent on the mainland to meet the needs of government and global enterprise leaders, including the NDRC.

In line with its commitments to the mainland, Cisco has created the role of chairman for the Cisco China Strategy Board with Jim Sherriff, the company's senior vice-president for global operations, and Randy Pond, executive vice-president of global operations, as co-chairmen.

The total value of Cisco's investments on the mainland since 2002 is about US$8.5 billion. According to the company's estimates, it has purchased more than US$7 billion of components and services on the mainland over the last five years, making the country a big part of its manufacturing supply chain.