By Eva Dou
BEIJING-- Cisco Systems Inc. said it will make investments and
partnerships worth more than $10 billion in China over the next
several years, as the networking-gear maker looks to strengthen its
position in the market amid geopolitical headwinds.
Cisco unveiled the plan on Wednesday, after outgoing Chief
Executive John Chambers and his replacement Chuck Robbins met with
Chinese Vice Premier Wang Yang and other government leaders in
Beijing. In its statement, Cisco didn't outline specific
investments or other targets, such as a time frame.
Cisco also said it signed a memorandum of understanding with
China's top economic-planning body, the National Development and
Reform Commission, to invest in areas that will help the country
achieve its long-term goal of innovation-driven development.
"Cisco is deeply committed to our Chinese partners," said Mr.
Robbins in the statement.
Cisco and other U.S. technology suppliers face a challenging
business environment in China after former U.S. National Security
Agency contractor Edward Snowden alleged the NSA used U.S.
technology products to help it spy overseas. China has upped its
use of domestic technology in response and is drafting stricter
technology security rules to govern foreign suppliers.
Cisco has said it had no knowledge of any NSA spying
activities.
The announcement also comes amid broader strategic changes at
Cisco due to the change of CEO, which is set to take place next
month. Mr. Robbins has flattened the global executive structure,
and the company said internally last week that several Chinese
senior executive positions would be removed. Mr. Chambers will
become executive chairman.
Cisco's China sales fell 20% in the quarter ended April 25 from
a year earlier.
Several other U.S. tech companies have announced large China
investments in the past year. Qualcomm Inc. said in July last year
it would invest up to $150 million in Chinese startups. Intel Corp.
said in September it bought about 20% of Tsinghua Unigroup Ltd.,
which owned the China's second- and third-largest chip-design
firms, for $1.5 billion.
Write to Eva Dou at eva.dou@wsj.com
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