Cisco announced that the company will cooperate with Inspur Group to jointly invest USD100 million to create a joint venture in China.
The agreement of the two parties includes resale of Cisco's network devices and joint development of hardware, which is reportedly a part of Cisco's USD10 billion China development plan announced in June 2015.
In June 2015, Cisco announced its USD10 billion investment plan, aiming to promote the development of China's high-tech industries. At that time, Cisco and China's National Development and Reform Commission signed a memorandum of cooperation, under which Cisco will cooperate with Chinese local firms and governments in various sectors, including innovation, investment, research, development, and employment.
Chuck Robbins, chief executive officer of Cisco, disclosed the JV cooperation via a blog. He said the two companies will first invest USD100 million. According to the agreement, Inspur will hold a 51% stake in the JV.
In recent years, Cisco's sales in China saw a decline in some areas. In addition, the Chinese government launched a project to support Chinese technology companies with the aim of building world-class enterprises that can compete with large technology companies from the Silicon Valley. In order to maintain their positions in the Chinese market, many American technology companies have announced cooperation, investment, or other transactions with Chinese enterprises believing perhaps if they "can't beat them, join them".