Cisco and China: A Long Term View

This week’s first state visit to the U.S. by China’s President Xi Jinping comes at an important moment for our countries, and for our industry, as President Xi meets with a number of important U.S. technology companies including Cisco. We have a long history in China spanning over 20 years, and today we continue to strengthen our commitment to our partners and to delivering meaningful innovation to the people of China.

My numerous trips to China over the past few years have reinforced the incredible opportunity ahead for this dynamic society. Over the course of our history in China, Cisco has helped connect millions of Chinese people to the Internet. During the 2008 Sichuan earthquake, our teams went in to face the disaster and help those impacted – ultimately leading to a long-standing program that has transformed both healthcare and education in the region. Through our Networking Academy Program, we have trained hundreds of thousands of students in the technical skills needed to help build China’s future.

We’ve always been deeply focused on our customers around the world and this is absolutely the case in China. We believe that next generation partnerships are required to deliver what our customers need to enhance China’s productivity and bring incredible new connected experiences to China’s citizens in the digital world. As we’ve developed long-standing relationships with our Chinese business partners, we have always remained true to our core values at Cisco: we do the right thing and we win together.

Today, as the entire country prepares to digitize, we continue to bring the power of the Internet to new areas – including manufacturing, transportation, education, and healthcare. I’m incredibly optimistic about the long-term prospects of successful partnerships in the country.

During my most recent visit in June, we announced a $10 billion investment to support local innovation, the country’s ongoing transformation, and the growth of local economies and businesses. Our commitment to China has never wavered, and I’m thrilled that today we signed a strategic cooperation framework agreement at the 8th China-U.S. Internet Industry Forum, with President Xi presiding.

Cisco and Chinese cloud computing and data center company Inspur intend to set up a joint-venture in China that will sell networking technologies and products, build world-class information technologies and solutions, and deliver other advanced technologies and services in areas including IT infrastructure, cloud, data center, smart cities, and big data. The companies will invest an initial US$100 million as part of an important first step towards the previously announced US$10 billion.

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% of our business, and being the world’s second largest economy, we see the potential to increase this considerably over time. Our fiscal Q4 results in China were more encouraging than any quarter over the past two years. During my June visit, we had incredibly constructive discussions with customers and key ministries that were focused on our ability to deliver customer solutions that only our unique partnership capabilities can bring.

I’m so proud of our team of passionate employees in China and their commitment to delivering the best of our innovation to the people of China. There has been a renewed energy with our team there and I believe they share my optimism about the future. I am also proud of the long-term, trusted relationships we’ve built in China that have contributed to Cisco’s success in the last twenty years, and together with our Chinese partners, I believe we have even greater opportunities ahead.