Cisco to double sourcing and manufacturing in China

Networking giant unveils plan for increased investment in China

By Dave Hannon -- Purchasing, 11/1/2007 11:32:00 AM

High-tech giant Cisco announced a series of initiatives this week under which it would increase its investment in Chinese businesses and source twice as much product from Chinese suppliers over the next five years.

On the sourcing side, Cisco plans to spend up to $16 billion in China over the next five years, almost double the $8.5 billion it has spent there in the past five years ($7 billion of that was on locally sourced components and services).

Cisco also plans to double the amount of manufacturing it does in China over the next three to five years. Cisco says its manufacturing and purchasing in China already support some 50,000 jobs.

Cisco is also partnering with the China Development Bank in considering a $100 million venture capital partnership to support innovative local Chinese businesses in Chain, as well as create a "green" technology center and develop products for small and medium-size businesses in that country.

"Cisco has a long track record of driving IT market growth through investment in the innovation economy," said Cisco Chairman and CEO, John Chambers at a press conference in China this week. "Today's announcements underscore both China's strategic importance to Cisco's global operations and the broad range of growth opportunities presented by the China market.”

Chambers also said Cisco and China's Education Ministry will open 300 centers at vocational colleges to train students in networking technologies, adding to 200 centers already operating that have taught some 90,000 people. The company said it will donate equipment worth $6 million.

See also: What capabilities Cisco suppliers need