While a number of western companies appreciate China’s critical role in their supply chain, the leading global organizations understand that the country is also strategic for all other aspects of their business.  I’ve heard from some of the outsourcing companies that Cisco is starting to make significant investments in developing China based engineering resources.  I also noticed this article in Information Week that describes some of the other investments that Cisco is making in China.  According to the article, Cisco has appointed a new SVP of Global Operations/Chairman of Cisco China and charged the individual with:

“…implementing the company’s China strategy, which includes research and development, education, procurement, investment, and training.”

Cisco also announced a number of key agreements that will help to ensure that their strategy is based on partnership with China’s government and that it spans both business and advanced education.  CEO/Chairman John Chambers shared several developments, including:

“…a memorandum of understanding with China’s National Development and Reform Commission. The agreement is for collaboration on Internet and environmental research and development, leadership training, best practice sharing, and business development investments, Cisco said.

In addition, Cisco has signed a memorandum of understanding with the communist nation’s Ministry of Commerce. The pact furthers Cisco’s commitment to providing assistance to Chinese businesses in the development of IT and business-process outsourcing within the country.”

This bit suggests that some of the rumors I’ve heard might have some substance.  It’s interesting to see that Cisco will be helping to foster the development of the ITO and BPO industries in China.  If the word that reaches me is accurate, they are already starting to spread some money around with key players.

The article continues…

“Cisco also has agreed to work with Peking University to create the Guanghua Cisco Leadership Institute for leadership training. Cisco plans to invest $20 million over the next three to five years in the institute.”

This one is especially important in that the shortage of local managers with global leadership skills has presented a challenge for both multi-nationals and domestic businesses that are building China operations.

It’s interesting to see one of the great tech companies take such a multi-faceted and comprehensive approach to securing their business in China.  Cisco’s efforts follow similar moves by IBM and Microsoft to demonstrate how important China has become to global businesses.

According to Mr. Chambers,

“The next stage of our strategy for China reflects the country’s importance to Cisco’s global growth strategy and to our long-term business model.”

Technorati Tags:  China, China Outsourcing