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China: Government Announces New Stimulus Package; Foxconn Faces New Labor Controversy


Microsoft and Boeing also make the news.


Microsoft (MSFT): To compete with rivals Apple and Google (GOOG), Microsoft is planning to invest heavily in China. Over the next year, the Redmond, Washington-based company will hire 1,000 new employees and up its research and development spending in China by 15%, reports Reuters. Right now, Microsoft spends $500 million each year on R&D.

One sector Microsoft is looking to focus expansion on is cloud computing, with Ya-Qin Zhang, chairman of the company's Asia Pacific R&D division, saying that it will construct a massive cloud computing center in Shanghai that will hire approximately 600 staffers.

Microsoft currently has about 4,500 people on its payrolls in China. With the new hires, the staff size will edge closer to that of its unit in India, which has a workforce of 5,800.

Boeing (BA): On Wednesday, Boeing said that it projects China will need 5,260 new commercial jets, valued at $670 billion, over the next 20 years. Additionally, 75% of those new planes will be for growth, not for replacing old jets.

Of course, not all 5,260 jet orders will go to Boeing, The Chicago, Illinois-headquartered company expects fierce competition from long-time rival Airbus, as well as Chinese upstart COMAC, which has already received over 300 new plane orders, mostly from Chinese airlines. Nonetheless, the room for growth in the Chinese aerospace market is clearly huge.

Earlier, Boeing had forecast that the Asia-Pacific market will require 12,030 planes over the next 20 years. Globally, the demand for passenger jets and freighters will hit 34,000 in the same period, it estimates.

Facebook (FB): Investors, don't get your hopes up on China propelling user growth for Facebook. The social network's North Asia director Jayne Leung said that it still has no plans to enter the China market, notes The Next Web.

Here's what Facebook said about China in its IPO filing earlier in the year:

China is a large potential market for Facebook, but users are generally restricted from accessing Facebook from China. We do not know if we will be able to find an approach to managing content and information that will be acceptable to us and to the Chinese government.

The same question about Chinese censorship raised by Facebook in its IPO can apply to Instagram, too, now that it's been officially acquired by Mark Zuckerberg's company.

No positions in stocks mentioned.
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