I just read an article in the New York Times that Cisco Systems, Inc. (NASDAQ: CSCO) will be growing their operations in China considerably. They plan a "multiyear $16 billion expansion in China ... with planned investments in manufacturing, venture capital and education."
The press release on Cisco's site offers more details on the program, but here is a sampling of what it will include:
- A significant increase in local procurement. In the past five years, Cisco has purchased more than USD $7 billion worth of China-sourced components and services, a critical part of the company's virtual manufacturing supply chain. According to Cisco estimates, these procurement commitments provide employment to 50,000 people in manufacturing management roles and through contract manufacturing and supplier partners.
- The total value of Cisco's commitments in China since 2002 are estimated at more than USD $8.5 billion, and under the initiative announced today, could expand to approximately USD $16 billion during the next five years, including significant increases in materials procurement, and increases in education, Cisco Capital, research and development, direct and indirect investments and sales and service operations.
- A commitment to expansion of the Cisco Networking Academies program in cooperation with China's Ministry of Education to add 300 additional academies in vocational colleges during the next three years, with a specific focus on China's central and western provinces.
- A memorandum of understanding with Alibaba Group, China's largest business-to-business (B2B) on-line portal. Under the MOU, Cisco and Alibaba will explore ways to jointly offer collaboration and business management solutions to small and medium businesses (SMBs) in China.
- The establishment of Cisco's first global "green" technology center to address the increasing need for sustainable development, energy efficiency, reduction of electronic waste, and emission reductions inside and outside of China.
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