According to Timothy Chen, president of Microsoft China, who was speaking at a conference in Beijing this week, Microsoft plans to invest "tens of millions" of dollars in developing China's software industry.

His remarks follow the company's announcement in June 2002 that it would invest $750 million over the next three years in China.

Microsoft has suffered recently because the government, which accounts for over 40% of software purchases in China, has openly declared a preference for homegrown software. The large majority of lucrative contracts to upgrade government networks awarded recently have mainly gone to domestic players such as UFsoft, Chinasoft and Kingsoft.