Dell commits $52bn to China sourcing

Dell will spend US$52 billion on Chinese-made computer components over the next two years, Reuters reported. The US company's purchases will total US$23 billion in 2008 and US$29 billion in 2009. This will take Dell's China spending to US$70 billion over the 2007-2009 period, said founder and CEO Michael Dell. "China is critical to Dell's global supply chain," he added. The US economic slowdown is expected to hit tech companies hard and they are increasingly looking to source components from China as a means of cutting costs. Cisco Systems, for example, has said it will almost double its China purchasing over the next five years to US$16 billion. Dell was also keen to emphasize China's importance as a customer. The company saw a 54% rise in sales in the country during its last financial quarter.