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​Cisco to set up joint venture with Inspur in China

Cisco plans to further grow its business in China starting with its new partnership with Inspur, and says it's open to forming more local partnerships.
Written by Aimee Chanthadavong, Contributor

Cisco and Chinese cloud computing and datacentre company Inspur have announced their intention to set up a joint venture in China.

In a blog post, CEO Chuck Robbins announced the joint venture will see the two companies invest an initial $100 million to sell networking technologies and products in areas of cloud, datacentre, smart cities, and big companies.

"I'm optimistic that working with Inspur will add to the recent momentum that we've seen in our business in China. Today, China represents approximately 3 percent of our business, and being the world's second largest economy, we see the potential to increase this considerably over time," said Robbins.

The extra funding is in addition to the $10 billion the company announced in June that it will spend over the next several years to focus on equity investment and research development in the country.

Robbins also added that the company will be open to more local partnerships as part of its future strategy in China. To further mark this commitment, Cisco signed a strategic cooperating framework agreement with President Xi.

Cisco's movement however goes against reports in February that the company, along with other US-based tech giants including Apple, Intel, and McAfee were dropped from the Chinese government's list of authorised brands in fear of ongoing mass surveillance and hacking by the National Security Agency (NSA).

In June Cisco's then-outgoing CEO John Chambers denied that any of the company's devices were being tapped by the NSA, and that in fact the company's reputation was stronger than ever.

"[Incoming CEO Chuck Robbins] and I have been travelling the world together for almost two years, and to almost every country. Cisco's reputation and trust is probably at the very top of countries around the world in terms of Europe ... or in China or Asia," he said at the time.

Over the weekend, the US and China signed an agreement that neither countries would support online espionage, however details of what that actually means remains unknown.

US President Barack Obama said he had reached a "common understanding" with his Chinese counterpart Presdient Xi that both sides would not "conduct or knowingly support cyber-enabled theft of intellectual property", including trade secrets or other confidential information that could be used for commercial advantage.

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