Cisco joins flurry of US-China tech partnerships

A pedestrian walks past Cisco Systems signage at the company's headquarters in San Jose, Calif.
David Paul Morris | Bloomberg | Getty Images

Cisco Systems said Thursday it would form a joint-venture with Chinese server maker Inspur to sell networking and cloud computing products in China, where the Silicon Valley firm faces political pressure and declining sales.

Cisco and Inspur said they would invest $100 million in the project, although they offered few other details.

The partnership is one of a growing number of tie-ups between Chinese and U.S. technology firms announced during or ahead of Chinese President Xi Jinping's visit to the United States this week.

Microsoft said on Thursday it would partner with Baidu Inc and Chinese state-owned private investment firm Tsinghua Unigroup on cloud technology, while Dell announced last week it would invest $125 billion over five years in China.

Earlier this year, IBM pledged to help develop China's advanced chip industry with a "Made with China" strategy, while chipmakers Intel and Qualcomm are developing chips with smaller Chinese companies.

Similar to its dealings with the foreign auto industry in decades past, Chinese officials have made clear to foreign technology firms that market access depends on their sharing technology and cooperating with Chinese industry.

Like many of its peers, Cisco's market share has retreated in recent quarters in China, where its products have been labeled a cybersecurity threat by state media and government-affiliated experts.

U.S. business lobbies have said the Chinese allegations amount to protectionism, while China has pointed to the experience of Cisco's Shenzhen-based rival Huawei Technologies, which faced similar accusations from Capitol Hill when it sought to enter the United States.