Cisco Systems, the world's largest networking equipment manufacturer, will invest about US$16 billion in the mainland over the next five years, marking its biggest investment programme outside the United States.
John Chambers, chairman and chief executive, said the investment strategy included an expansion in mainland-sourced components and services, education, customer financing, research and development, sales and service operations, and other direct and indirect investments.
Cisco yesterday also established a broader partnership with Alibaba Group, the mainland's largest business-to-business portal operator, after agreeing to invest US$17.5 million in Alibaba.com, a subsidiary of the group, as part of its initial public offering on the Hong Kong stock exchange.
'Our [new investment] commitment will lay the foundation for the next chapter in Cisco's development in China,' said Mr Chambers.
Cisco's aggressive spending is expected to help grow business across new markets in the mainland where it competes with other multinational networking gear suppliers and homegrown rivals Huawei Technologies and ZTE Corp.
'Today's announcements underscore both China's strategic importance to Cisco's global operations and the broad range of growth opportunities presented by the market, particularly as an innovator in the next wave of the internet's development in collaboration and Web 2.0 technologies,' Mr Chambers said.
The total value of Cisco's investments in 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 in the mainland over the last five years, making the country a big part of its manufacturing supply chain.
