Microsoft is to step up its long-term investment in China, the company's Chief Executive Officer Steve Ballmer announced Tuesday in Beijing, during a two-day visit to the country.
Ballmer committed Microsoft to expanding its Asia Regional Engineering Center in Shanghai through a total investment over the next few years of $US40 million, the company said in a statement. The investment will mean that the customer support center will double in size to employ 600 engineers, up from 300 today, and beef up its role to act as a Net global support center for Windows development tools and Microsoft's Office software suite.
Also Tuesday, Ballmer revealed that Microsoft is looking into potentially setting up a Sino-Foreign joint venture company with Beijing Centergate Technologies (holding) Co. Ltd. as a way to develop the local software industry in China. The Chinese government has frequently voiced concern as to how to protect and grow the country's own software industry in the face of giant foreign players such as Microsoft, who threaten to dominate the local market.
Should the joint venture go ahead, one of its aims will be to boost the development of Beijing's high-tech zone -- Zhonguancun -- to promote it as a center for software development and technology ventures, Microsoft said in the statement. The U.S. software vendor has offered to provide the joint venture with technical, management, business and financial know-how and support once the operation is up and running.
During his two-day trip to Beijing, the Microsoft chief met with Chinese Premier Zhu Rongji.
"Our strategy in China really focuses on long-term investment," Ballmer reportedly told Zhu, according to a Microsoft statement. "We would like to cooperate with local industry, partners and government organizations to build up a win-win relationship and to help China embrace the knowledge economy."
Ballmer also met with Chinese Minister Wu Jichuan, who heads the Ministry of Information Industry (MII), the country's IT ministry.
The Microsoft CEO applauded the passage in the U.S. Senate Tuesday of a bill that will establish permanent normal trade relations between China and the U.S. "Today's vote is great news for the American economy," Ballmer said in the Microsoft statement. "Free trade with China will help narrow our trade imbalance, create additional jobs here at home, and continue to spur innovation in America's high-tech industry."
During his trip, Ballmer also talked up his company's .NET initiative at a conference in Beijing attended by more than 2,000 Chinese IT professionals and developers.
Microsoft has had something of a mixed experience in China, reportedly having occasional run-ins with the government. The most recent incident flared up early this year, as reports circulated that Chinese government ministries were banning staff from using Windows 2000 in favor of locally developed Red Flag Linux. Bill Gates, Microsoft's chairman and chief software architect, was last in China in March 1999 when he visited Shenzhen, one of the country's SEZs (special economic zones), areas established by the Chinese government to encourage foreign companies to set up businesses there and invest in the region. Gates officially unveiled Venus, a set-top box specially designed for the Chinese market and based on Microsoft's Windows CE operating system. He also held discussions with Chinese officials about how to fight back against software piracy.