The State Development & Planning Commission of the People’s Republic of China & Microsoft Corp. Sign A Memorandum of Understanding To Begin the Largest Joint Sino-Foreign Software Industry Cooperation

REDMOND, Wash., June 27, 2002 — The State Development & Planning Commission of the Peoples Republic of China (SDPC) and Microsoft Corporation (Microsoft) today signed a memorandum of understanding to begin the largest joint Sino-Foreign software industry cooperation in China. The Memorandum is another step in Microsofts and the Government of the Peoples Republic of China in working together to build a dynamic Chinese software industry which will be an active contributor to the global technology market. Minister Zeng Peiyan and visiting Microsoft CEO & President Steve Ballmer attended the signing ceremony today.

Under the Memorandum Microsoft will invest RMB 6.2 billion (USD 750 million) in China in the next three years in the areas of education and training, academic and research cooperation, hardware manufacturing outsourcing, continued support in software outsourcing and strategic investments and cooperative developments in local software companies.

According to the memorandum, SDPC and Microsoft will establish the SDPC-Microsoft Cooperation Committee and a subsidiary Working Group to meet regularly to discuss issues of importance to the software industry and to guide and drive the implementation of the MOU. Minister Zeng Peiyan of the SDPC and Bill Gates, Chairman of Microsoft will both act as the Chairmen of the Cooperation Committee; Vice Minister of the SDPC Mr. Zhang Guobao, Microsoft Chief Executive Officer Steve Ballmer and Chief Technology Officer Craig Mundie will be Vice Chairmen.

The SDPC stated, The signing of this MOU will have a significant impact in attracting foreign investments in China, expanding the export of software and related IT products, and the import of advanced technologies and management experience from abroad. Looking forward the SDPC will proactively foster conditions to drive cooperation between Chinese enterprises and reputable multinational enterprises thereby accelerating the development of the Chinese software industry in a more open environment.

Microsoft is delighted to extend our relationship with China and help further the development of a strong, sustainable software industry for the benefit of everyone in the country, said Ballmer. We look forward to working closely with the SDPC and Chinese industry partners to further eGovernment initiatives and grow Chinas digital economy.

To help China rapidly improve its software technology, Microsoft shall assist China to develop world-class software talents, especially project management professionals and software architectural design professionals. This will be jointly organized by SDPC and Microsoft, cooperating with 11 national software parks in China. Microsoft will also license some Microsoft Research Asias (MSRA) technical development accomplishments to local Chinese enterprises for the purpose of developing software products, thereby driving the formation of the industrial chain. SDPC will recommend the companies Microsoft shall work with.

In addition to that, SDPC will also select entity to cooperate with MS on key national informatization projects.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

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