US computer networking giant Cisco Systems aims to grow China into one of its top three markets within five years, a company executive said yesterday.

Company Chairman and CEO John Chambers said China, which is "in a dynamic state of transition", is emerging as a strategic market for Cisco, the world's largest maker of routers, switches and other equipment that make up the Internet.

The ambitious goal comes on the heels of a $16 billion expansion plan for China unveiled by Cisco in November. And it comes at a time when China is overtaking the United States as the world's largest Internet population, and businesses in the country are embracing networking technologies, especially network-enabled collaborations, to cut costs and increase operational efficiency to compete in a globalized market.

This is fueling demand for expansion and upgrade of the country's Internet networks, which could unleash orders for networking gear and services provided by Cisco.

Chairman and CEO of Cisco Systems John Chambers delivers a speech at Peking University yesterday, where Cisco announced a deal with the university to invest $20 million to establish the Guanghua Cisco Leadership Institute to train China's business and government leaders.

Chambers said Cisco will sign a memorandum of understanding today with the National Development and Reform Commission (NDRC) to cooperate in a number of areas, including the next-generation Internet, and green research and development programs.

The NDRC has been spearheading research and building of the China Next Generation Internet (CNGI), which could offer faster and more secure access, and larger network capacity.

To capitalize on the networking boom, Chambers said the firm has formed the Cisco China Strategy Board, a cross-functional executive board of senior leaders across the company's global business, which could better allocate and utilize its global resources to boost its China operations.

That marks the biggest shift in Cisco's corporate strategy since its entry into the country in 1994, and underlines the growing aggressiveness of US majors in expanding in China at a time when their domestic operations face a slowing US economy.

General Electric, the world's biggest industrial company, was quoted by Financial Times on Tuesday as saying it will invest $2 billion in the country to double its sales in China, after announcing its worst quarter of financial results in five years last week.

In its last earnings report, Cisco warned of a rapid slowdown in US and European orders. But "one of the key drivers of Cisco's differentiated strategy is our ability to capture market transitions", Chambers said.

Cisco yesterday also announced an investment of $20 million to set up a leadership institute, partnering with Peking University, to train business leaders and senior officials for ministries such as the NDRC.

Today it will sign a deal with the Ministry of Commerce to help train employees in China's BPO (business process outsourcing) industry. Chambers said Cisco will transfer some of its global business process services to China over the next three to five years.

(China Daily April 17, 2008)