-- A significant increase in local procurement. In the past five years,
Cisco has purchased more than USD $7 billion worth of China-sourced
components and services, a critical part of the company's virtual
manufacturing supply chain. According to Cisco estimates, these procurement
commitments provide employment to 50,000 people in manufacturing management
roles and through contract manufacturing and supplier partners.
-- The total value of Cisco's commitments in China since 2002 are
estimated at more than USD $8.5 billion, and under the initiative announced
today, could expand to approximately USD $16 billion during the next five
years, including significant increases in materials procurement, and
increases in education, Cisco Capital, research and development, direct and
indirect investments and sales and service operations.
-- A Memorandum of Understanding with China Development Bank to explore a
joint investment program that would provide capital and expertise for
innovative Chinese businesses. The initiative is intended to support high-
growth Chinese companies over multiple sectors, with a focus on information
technology, "green" innovators, and other key segments (see separate
announcement).
-- A commitment to expansion of the Cisco Networking Academies program in
cooperation with China's Ministry of Education to add 300 additional
academies in vocational colleges during the next three years, with a
specific focus on China's central and western provinces. Currently, there
are more than 200 Networking Academies in 70 cities throughout China, which
have trained more than 90,000 students since inception. The new initiatives
will add the capacity to train an additional 100,000 students by 2010.
Cisco will also donate more than USD $6 million worth of networking
equipment to assist in establishing labs in the new academies.
-- A memorandum of understanding with Alibaba Group, China's largest
business-to-business (B2B) on-line portal. Under the MOU, Cisco and Alibaba
will explore ways to jointly offer collaboration and business management
solutions to small and medium businesses (SMBs) in China. Under a previous
agreement, Cisco will also invest USD $17.5 million in Alibaba.com Limited,
a subsidiary of Alibaba Group, as part of its planned initial public
offering on the Hong Kong Stock Exchange, becoming one of only eight
cornerstone investors in the listing (see separate announcement).
-- Establishment of incremental funding up to USD $400 million for Cisco
Systems Capital China for providing financing facilities to Cisco customers
in China during the next three to five years. Cisco Systems Capital China
commenced captive financing operations in June 2006 and has funded USD $60
million in customer assets to date.
-- The establishment of Cisco's first global "green" technology center to
address the increasing need for sustainable development, energy efficiency,
reduction of electronic waste, and emission reductions inside and outside
of China. The center will also augment existing programs underway by Cisco
China's R&D teams in the area of application specific integrated circuits
(ASIC) power efficiency design and expand this into other product areas.
-- Establishment of product and research teams to develop innovative
networking equipment to address the SMB (small and medium business) market
and emerging countries markets, leveraging local design and manufacturing
resources.
Cisco first established operations in China in 1994 and now employs more
than 2,300 staff in sales, customer support and service, research and
development, BPO/IT outsourcing, Cisco Capital and manufacturing. The
company has 12 offices in China, a major R&D facility in Shanghai,
Scientific Atlanta R&D/manufacturing facilities, as well as several
development centers supporting WebEx, which Cisco acquired in March 2007.
About Cisco Systems
Cisco (Contact Information: US Contact: John Noh (408) 853-8445 jnoh@cisco.com China Contact: Terry Alberstein +61-401-890-381 talberst@cisco.com China Contact: Leilei Tang + 86-13701118915 leitang@cisco.com