Microsoft
invested US$20 million in a Beijing-based domestic software
firm yesterday, aiming to strengthen its commitment to
the Chinese market and tap into the nation's software
engineering talent pool.
International
Finance Corp (IFC), an investment arm of the World Bank,
also invested US$15 million in the same firm, ChinaSoft
International Ltd. The company is under the control of
the State-owned China National Software and Service Co
Ltd (CS&S).
The
parties involved declined to disclose how big the stakes
of Microsoft and IFC are. ChinaSoft International is valued
at HK$788 million (US$101 million) on the Growth Enterprise
Market in Hong Kong. The trading of ChinaSoft International's
stocks was suspended yesterday because of the issuance
of new stock to the two firms. Its stocks closed slightly
higher on Friday at HK$1.13 (17 US cents), from HK$1.12
on Thursday.
"We
have been searching for a model of development in China,
but with this investment into ChinaSoft International,
we have found our way," said Tim Chen, the CEO of
Microsoft China, in Beijing.
ChinaSoft
International is the second Chinese software firm that
Microsoft has invested in this year. The first was the
Langchao Group in east China's Shandong Province, which
got US$25 million from the firm.
Chen
said the investments showed Microsoft's confidence in
its long-term prospects in China. He said previous activity
was mainly focused on sales, local development, and technological
cooperation.
He
added that the move also showed his firm's commitment
to bringing Chinese software firms to the international
marketplace.
Microsoft
signed an agreement with the Chinese Government in 2002
to invest US$750 million in China in three years, believed
to be a major move to win trust in China, its biggest
potential market.
Microsoft
made all its Xbox game consoles in China last year, generating
an output value of 8 billion yuan (US$989 million).
It
also signed up with four global strategic partners, giving
outsourcing orders to them and training almost 1,000 engineers
for Chinese firms. This has also helped the software giant
reduce its development costs.
Microsoft
held a Tech Ed 2005 in Beijing on Friday to demonstrate
its new products to Chinese customers and developers.
Tang
Min, chairwoman of SCS&S and ChinaSoft, said: "China's
software industry is facing an unprecedented opportunity
in the world and is at the turning point of its transition."
(China Daily September 27, 2005)
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