Will invest in education, research and development
American networking giant Cisco has announced a range of initiatives designed to increase its presence in China.
The company said it will invest more than $10 billion into the country, but didn’t provide details on how this money will be spent, or when.
The investment package was outlined by outgoing CEO John Chambers and his successor Chuck Robbins, as they visited China to meet with Chinese vice premier Wang Yang and leaders of other government agencies in Beijing.
“Cisco is deeply committed to our Chinese partners,” said Robbins. “With these new partnerships and initiatives, Cisco is investing in the next generation of Chinese technology innovation, helping capture the opportunities presented by digitization and committing Cisco resources to ensure success together.”
Source: Thinkstock / Sean Pavone
Room to grow
China is in the middle of a massive shift towards a more connected society. This change is spearheaded by the government through initiatives like ‘Internet+’ and ‘China Manufacturing 2025’. According to analyst firm IDC, the Chinese information and communications technology market is expected to be valued at $465 billion in 2015.
The country will continue to require large amounts of network infrastructure, and Cisco wants to be among the providers. However, the state has traditionally favored domestic companies over foreign competitors, and this tendency only grew stronger following revelations of digital surveillance by the US intelligence agencies.
According to the Washington Post, both Cisco and Apple were recently removed from the list of approved government suppliers.
Cisco hopes to reverse the trend by signing an agreement with China’s National Development and Reform Commission to expand investment, with a focus on innovation, R&D and job creation.
Cisco has also pledged support to China’s Association of Universities of Applied Science (AUAS). The company will invest in a four-year educational program with 100 universities recommended by AUAS through the Cisco Networking Academy.
“In the future, Cisco will continue to work closely with the government and local partners on national development programs to better meet demand in the local market, provide better products and services to Chinese customers, create tremendous business value for Chinese companies, and contribute to China’s transformation, technological innovation and economic growth,” said Owen Chan, chairman and CEO of Cisco Greater China.
Cisco’s increased investment can also be seen as a response to the rise of Huawei and ZTE. According to IHS, Huawei is currently the world’s largest telecommunications equipment vendor, with Cisco being a close second.