Chinese Commission, Microsoft Sign Contract on Software Cooperation

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Last updated at: (Beijing Time) Friday, June 28, 2002

Chinese Commission, Microsoft Sign Contract on Software Cooperation

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Chinese Commission, Microsoft Sign Contract on Software Cooperation

The State Development Planning Commission (SDPC) announced Thursday that it has signed a memorandum of understanding with Microsoft on software cooperation worth of 6.2 billion yuan (756 million U.S. dollars).

"We have entered the third phase of our development in China - that is to grow as a full and valuable participant and partner in China's software industry," said Steve Ballmer, president and chief executive officer of Microsoft.

The first two stages were product sales and marketing, and the establishment of research facilities.

Ballmer made the remarks after signing co-operation pacts with the State Development Planning Commission (SDPC) and the Ministry of Education on Tuesday and yesterday respectively.

According to the memorandum of understanding (MOU) between SDPC and Microsoft, the US company will invest 6.2 billion yuan (US$750 million) in three years in education and training, academic research and co-operation, hardware manufacturing outsourcing, support in software outsourcing and strategic investments in local software companies.

The company will launch a "Great Wall Plan" in the next three years with 200 million yuan (US$24 million) determined in the MOU to co-operate with 35 Chinese universities, which have been approved to set up software colleges.

The US software vendor also said they will invest 4 million yuan (US$500,000) in a joint venture to build a software college and offer software services with Shanghai Jiaotong University and two Shanghai companies, controlling 10 per cent of the stakes in the venture.

"The co-operation will help Microsoft build a good corporate image in China and lay a stable foundation for its future development in China," said Zhao Qinping, vice-minister of MOE.

Microsoft was once troubled by the government's dislike for its reluctance in investment, security problems of its products and their high prices.

Fang Xingdong, author of the famous book "Who Will Challenge the Hegemony of Microsoft," said Microsoft still needs to solve the problems of high prices and security to achieve long-term development.

"The high pricing actually prevents the use of its authorized products and is harmful to the adoption of information technologies in China," Fang said.

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