Global Economics

Cisco China: Keen to Be Green


The networking company's new billion-dollar investment initiative in China includes plans for its first global green technology center

Cisco is to significantly ramp up its investment in China, including a green technology centre, the networking firm announced on Thursday.

The three- to five-year plan is "in alignment with [China's] long-term economic, societal and environmental goals," according to a statement from Cisco. The company began investing in China in 1994 and already employs more than 2,300 staff there, in divisions ranging from sales to research and development and manufacturing.

"Today's announcements underscore both China's strategic importance to Cisco's global operations and the broad range of growth opportunities presented by the China market, particularly as an innovator in the next wave of the internet's development in collaboration and Web 2.0 technologies," said Cisco chief executive John Chambers in Beijing.

The company will establish its first global "green" technology centre in China, where it will research energy efficiency, emissions reductions and the reduction of electronic waste.

However, Cisco will have its work cut out when it comes to improving China's environmental footprint. A report from the Netherlands Environmental Assessment Agency in June estimated that China's CO2 emissions rose nine percent in the past year, compared with 1.4 percent in the US. China produced 6,200 million tons of CO2 pollution, compared with 5,800 million tons from the US.

One reason for China's massive CO2 emissions is that companies in the West have effectively exported a great portion of their manufacturing to the region, according to Greenpeace. "The only thing corporations were interested in was the price of labor," said Greenpeace UK executive director John Sauven recently. "This trend kept the price of our products and inflation down, but at the cost of soaring greenhouse-gas emissions in China. In the long term, this policy has been a climate disaster. It's the downside of globalisation."

Cisco's program will include an increase in local procurement, a memorandum of understanding with China Development Bank to "explore a joint investment program that would provide capital and expertise for innovative Chinese businesses", and a tie-in with the Alibaba business-to-business portal to supply collaboration products to Chinese SMEs.

Cisco claims that its commitments in China--worth around US$8.5 billion since 2002--could almost double to US$16 billion during the next five years. Part of this commitment will include an increase in the amount of financing Cisco is making available to its customers in China. Cisco Systems Capital China has already provided US$60 million for such purposes, but could provide as much as US$400 million over the next three to five years.

The company also plans to expand its Cisco Networking Academies program in China. There are already more than 200 such academies in China, but negotiations with the country's Ministry of Education have resulted in the likelihood of a further 300 being established.

Cisco has in the past come under fire from human rights groups for its close links with the Chinese government, having provided the infrastructure behind the so-called "Great Firewall of China", which aims to block Chinese internet users from accessing websites deemed unsuitable by the communist government.

Provided by ZDNet Asia—Where Technology Means Business

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