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Dell To Invest $125 Billion in China’s “Unlimited Potential”
As local PC makers including Lenovo grapple to raise revenue, U.S.-based Dell is making an all-out commitment to China, pledging to invest $125 billion USD over the next five years, citing the “unlimited potential” of the world’s second largest economy.
“The internet is the new engine of China’s future economic growth,” said Dell CEO Michael Dell in a statement.
The statement hinted that Dell’s investment would be very much focused on localizing the PC giant, as well as streamlining company goals with those of the current government.
“Dell will embrace the principle of ‘In China, For China’, and closely integrate Dell China strategies with national policies.”
In 2010, Dell had previously announced a planned spend of $250 billion in China over 10 years. If the newest pledge is part of the original amount promised in 2010, then Dell has spent roughly half of the original pledge, and is expecting to spend the same again before 2020.
Before their privatization in 2013, Dell had seen annual China sales the range of $5 billion USD annually.
China is currently in the midst of a giant policy push to bring up its tech sectors, boost infrastructure and increase innovation among existing tech companies and institutions. Earlier this year they announced the ‘Internet Plus’ policy, aiming to invest hundreds of millions in taking traditional industries online.
At the same time, China’s sovereign wealth funds have been increasingly generous to new innovations and startups in the tech sector. Last month it was revealed sovereign wealth fund China Investment Corporation (CIC) had participated in the $2 billion USD funding round of Didi-Kuaidi, the country’s biggest ride-sharing app.
While the attitudes of policy makers are certainly in favor of tech right now, Dell may have to deal with some of the country’s more protectionist policies. China has made it clear that the operations of foreign-run tech companies are subject to scrutiny from the government.
Earlier this year the government briefly announced a policy that would phase out foreign technology, including operating systems and computing hardware, in Chinese banks. They later put the policy on hold, though the move put pressure on the marriage between Chinese banks and the foreign tech companies that use them.
Dell currently ranks third in global PC shipments behind Lenovo and HP. China-based Lenovo has felt the sting of China’s sluggish economy recently, slashing 10% of their white collar workforce, accounting for 5% of the entire company, in an effort to save $1.3 billion USD annually.
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