Intel Capital Corp, Intel Corp's global investment vehicle, announced last week its first storage investment in China to develop its cloud-computing capability.

It signed an agreement with United Information Technology Co (UIT), a leading Chinese storage products and solutions provider, but did not reveal the investment amount. The investment money was from its $500 million special fund for Chinese technology companies.

Cloud computing is online computing that uses the Internet, instead of a hard drive, for data storage.

"We develop the data center as our overall strategy and seek related companies as our partners," said Arvind Sodhani, executive vice-president of Intel Corp and president of Intel Capital Corp.

"Storage is a key component, and our investment will strengthen the competitive edge of Chinese companies in global markets."

He said that Intel Capital has a long-term business interest in UIT and the development of cloud computing. UIT's cloud-computing storage platform can help Intel Capital to set up a cloud-computing ecosystem and serve end users, he said.

According to Sodhani, Intel Capital regards China as its second-largest investment target in after the United States and its annual global investments amount to $300 million and $500 million.

"We will step up our investment in China and plan to complete 12 deals here this year," he said.

Sodhani said that when choosing a company, he looks for a strong position in the industry, good management team and innovative solutions. On Wednesday, Intel Capital also announced it would invest in B-soft Co, a leading Chinese medical-solutions supplier.

Yang Xu, president of Intel China Ltd, said that Intel is the only technology company joining a project called the "open data center" set up by global large end users including banks and insurance companies. China Mobile Ltd and China Life Ltd are two of the most important organizers.

"More and more end users have realized the importance of cloud computing and an open data environment, so they set up the alliance," said Yang. "Intel also aims to be open, and feels obliged to make a contribution to the project."

Zhou Baoyuan, an expert in electronics and information technology at the Ministry of Industry and Information Technology, said that cloud computing is increasingly popular in China but there have not been clear policies regarding the emerging industry.

"There are many companies stepping up to develop cloud computing technology, and China has set up five pilot cities including Shenzhen to observe the results," Zhou said.

Intel Capital and UIT have complementary advantages and their strategic cooperation can be advantageous to the market, he said.