Microsoft Eyes Chinese Market

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Last updated at: (Beijing Time) Friday, January 18, 2002

Microsoft Eyes Chinese Market

Microsoft 's high-ranking vice president, Craig Mundie, said Thursday in Beijing that the world's computer software giant is entering into a new development stage in China. During a meeting with Beijing Mayor Liu Qi, Mundie said Microsoft aims to develop application software suitable to the Chinese market and support China's information industry project.

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Microsoft's high-ranking vice president, Craig Mundie, said Thursday in Beijing that the world's computer software giant is entering into a new development stage in China.

During a meeting with Beijing Mayor Liu Qi, Mundie said Microsoft aims to develop application software suitable to the Chinese market and support China's information industry project.

Microsoft's first software joint venture in China set up

As the economy grows, Chinese enterprises have an increasing demand for software. Microsoft launched its first software joint venture in China on Wednesday in Beijing, with an investment of US$2.2 million.

Microsoft's two local partners -- the domestically listed Beijing Centergate Technologies Holding Co Ltd (CENTEK) and Hong Kong listed Stone Group -- hold 51 per cent and 30 per cent respectively of the Zhongguancun Software Company, which has a registered capital of 100 million yuan (US$12 million). All three parties invested in cash.

CENTEK President Duan Yongji will chair the board, and Zhu Xiduo, former president of Stone Group, will assume the presidential position. Microsoft will recommend a chief technology officer for the joint venture, which will be based in Beijing's high-tech hub, Zhongguancun Park.

The new company will develop enterprise and government application software based on the resources of the three parties, provide system integration services for enterprises and government departments, and offer software outsourcing, training and consultancy services, said Zhu.

"The business development model for the company will be unique," he said. "We expect to turn it into one of China's largest software enterprises and software exporters in five years."

CENTEK has a strong governmental background, a rich access to business opportunities and a state-of-the-art data centre. Stone Group excels in its expertise in system integration and information technology (IT) services.

Although Microsoft's US$2.2 million investment in the company allows it to control 19 per cent, company officials lauded the move as a milestone ins its newly unveiled Great China Region Strategic Business Development (SBD) plan, which aims to promote strategic investment and partnership in China, and facilitate its local IT partners to develop both the Chinese and international market.

"This is the first software company that Microsoft invests in and supports," said Craig Mundie, svice-president and chief technology officer of Microsoft.

China's software industry to get further development

The partnership comes amid a time when China's software industry, driven by the nation's robust economic growth and the strong demand on IT spending, is emerging as one of the world's top software export bases.

The widely lauded accession to the World Trade Organization and Beijing's success in bidding for hosting the 2008 Olympic Games are expected to bring significant changes to its economy, which is bound to fuel a huge demand for advanced IT products and application software.

Chinese Scientific and educational departments have stepped up the upgrading of computer software and integrated circuitry production to give an impetus to the country' s high-tech industries and economic growth.

China's software and information technology industry will grow by more than 30 per cent annually for the coming five years, according to the 10th Five-Year Plan (2001-2005).

Microsoft occupies 19 percent of the shares of the joint venture, which aims to develop application software for Chinese enterprises and governmental organizations.

Bill Gates Pledges Full Support for China's Software Industry

Microsoft founder Bill Gates Friday pledged full support for the software industry in China, saying that a prosperous software industry will not only boost the development of China's knowledge-based economy but also facilitate China's leading role in global economy and partnership.

Gates, who is in Shanghai attending the on-going APEC CEO Summit, said the support will cover the areas of professionals, technology, market demand and capital.

He said that may explain why China has been drawing tremendous attention from the company despite the fact that China accounts for only an estimated 0.5 percent of Microsoft's total annual sales. Full Story

By PD Online Staff Li Yan

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