Microsoft invests US$900 million in China

Microsoft signed a US$900 million deal with China to promote the growth of the country's software industry.

Microsoft continues its strategic investments in the growing Chinese technology market. The software vendor has signed a US$900 million deal with China to promote the growth of the country's software industry, China's National Development and Reform Commission (NDRC) said Wednesday.

In a press statement, the NDRC said that Microsoft will invest 1.6 billion renminbi (US$200 million) over the next five years to support joint ventures and partnerships with Chinese software companies and for developing other software and service projects. Microsoft also plans to export US$700 million in hardware from China as part of the deal, according to the commission

In addition to its monetary investment, Microsoft and the NDRC will establish the NDRC-Microsoft Software Innovation Center, aimed at the advancement of innovation and product development among Chinese software companies.

The U.S. software company also will continue to aid China with fostering and training software engineers, with the goal of training about 10,000 professional software developers and engineers either in Chinese classrooms or through the Internet.

According to the NDRC, the deal announced Wednesday is phase two of a "Memorandum of Understanding" the two parties first signed in 2002. At that time, Microsoft committed to an investment of $750 million in exports, academic research, education and training and cooperative development with software companies and other institutions in China.

Microsoft has taken a great interest recently in China. In recent weeks, Microsoft has publicly signed deals with three Chinese hardware companies -- Tsinghua Tongfang Co., TCL and Lenovo Group -- to distribute its Windows OS on hardware in China. The Lenovo deal alone was worth about US$1.2 billion.

Microsoft even hosted Chinese President Hu Jintao on its Redmond, Washington, campus during the official's visit to the Seattle area last week. After the visit, President Hu dined at the home of Microsoft Chairman and Chief Software Architect Bill Gates.

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