International Business Machines Corp plans to expand in the venture capital sector in China, including a newly launched innovation center in Shanghai.

"I have been in China for a month to see how we can expand the business in this robust economy. The one thing I'm sure of is that we will increase investment here," said Claudia Fan Munce, managing director of IBM venture capital group, yesterday.

IBM has invested US$600 million building 39 such centers worldwide and the Shanghai center will be the only IBM Innovation Center on the Chinese mainland.

By cooperating with venture capital firms, IBM's Venture Capital division will provide startup companies with free IT equipment and service in the initial stage and it will help them use IBM's distribution channels and IIC centers for product testing and research.

IBM has invested in 200 companies in China, and a total of 1,300 in the world, such as Alibaba.com, Linktu and YeePay.

IBM does not take an equity stake in these companies but the companies become IBM's "revenue partners" when they grow. IBM finds industry trends and strategic insights from its investments, Munce said.

"We are not a money manager for short-term profits though we also pursue revenue growth," said Munce. IBM's income from partners totaled US$30 billion in 2007, one-third of its revenue.

(Shanghai Daily July 30, 2008)