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May 4, 1994


By CBR Staff Writer

IBM Corp announced yesterday that China’s electronics ministry had officially endorsed the PowerPC RISC architecture as part of a broadbrush agreement that could lead to investments of up to $100m. A broad memorandum of understanding signed on Thursday in New York will also raise IBM’s profile in China’s telecommunications market. The deal commits the Ministry of Electronics Industry to introduce PowerPC technology and products in China and developing supporting software. The ministry noted that it had no similar agreement with Intel Corp – because all microcomputers in China already use Intel chips, a spokesman told Reuters. Under the memorandum, IBM becomes a networking consultant to the ministry on China’s three golden projects – nationwide data networks for information exchange, credit card business and customs – and forms a networking joint venture. The agreement commits IBM to allocating $100m in capital and project expenses over two years – the venture, with ministry-affiliated networking company Jitong Communications will alone require several million dollars of IBM capital, although details are still being worked out. China is required to contribute investment and expertise, particularly for developing Chinese-language software for IBM computer and networking products. There was no demand for any expansion of IBM’s manufacturing ventures in China or for any new ones to be set up.IBM will establish a software development centre in Shanghai, developing applications for export and domestic use. It will also open computer centres in the major cities.

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