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Motorola sinks $90 million in China

The telecommunications gear maker plans to make a multimillion-dollar investment to set up a research company in Beijing--SARS or no SARS.

Communications equipment maker Motorola said it will invest $90 million to set up a new research company in Beijing, SARS or no SARS.

Despite U.S. travel advisories cautioning against visits to countries such as China that have been hit by the severe acute respiratory syndrome, Mike Zafirovski, Motorola president and chief operating officer, made a one-day stop in the mainland to announce the investment last Saturday.

On top of the initial $90 million investment, the company said in a statement that its new research center will also spend $500 million on manpower and equipment over the next five years.

"My presence here demonstrates both Motorola's concern for its employees as well as our confidence in China's ability to fight the spread of SARS," said Zafirovski.

Motorola had closed its Beijing office at the end of April because an employee came down with the illness. It was scheduled to reopen the office Monday.

Like many technology companies, Motorola sees China as an enticing locale in which to both build and sell products.

"China is an important market for Motorola worldwide as well as a manufacturing base and research center for the company," Zafirovski added.

Despite trailing Finnish phone giant Nokia in other parts of the world, Motorola, which is based in Schaumburg, Ill., continues to enjoy a dominant market position in China. The company is currently one of the country's largest overseas investors in with 18 regional or global research and development centers and another seven under construction.

In the past few months however, fierce competition from Chinese cell phone manufacturers has started to erode the company's market share, prompting Motorola to step up its product launches in the country.

Besides unveiling the new research venture on Saturday, the telecommunications gear maker also donated $1.4 million in equipment and cash to Chinese authorities to help combat the deadly SARS virus.

To date, the disease has claimed 284 lives in China, and a further 5,233 have been diagnosed with the virus.

CNETAsia's Winston Chai reported from Singapore.