Software giant spends its way into Beijing’s good graces. Microsoft plans to spend in excess of $3.7 billion in China over the next five years, company officials said Wednesday in Beijing.

Microsoft pledged to train approximately 10,000 Chinese software engineers through classroom and online training programs.

President Hu’s visit, timed to correspond with pledges by Beijing authorities and Chinese PC makers to protect Microsoft intellectual property through pre-installation of Windows operating systems, marked a significant breakthrough for the company, which has faced political and piratical obstacles in its Chinese operations

The memorandum of understanding (MOU) signed on April 18 between Microsoft and China’s top economic planning body, the National Reform and Development Commission (NDRC), lays out the terms for a second phase of cooperation between Microsoft and Beijing authorities.
 
The first phase, signed in June of 2002 with NDRC’s predecessor, the State Planning Commission, involved a $750-million investment by Microsoft in a Beijing-based research and development center and online software development training programs for Chinese software engineers.

A joint statement released by Microsoft and NDRC specifies that Microsoft will provide $100 million to support domestic Chinese software enterprises; will purchase Chinese software products and tech support, software development, and testing services worth $100 million; and will make hardware purchases in excess of $700 million each year for the next five years.

NDRC and Microsoft will establish a joint Software Innovation Center with branches outside the major metropolitan areas. The total cost of the center, and Microsoft’s contributions to it, have not been released.