China continues to be a growth market for U.S.-based technology companies – with news today that Microsoft (News - Alert) will hire over a thousand more employees by the end of the current year.

The new employees will be assigned to research and development, marketing and customer service functions. It was also reported that Microsoft will increase its research and development spending by 15 percent in the nation.

It is apparently adding resources in China to compete with rivals Apple (News - Alert) and Google in mobile Internet market, The Associated Press reported.


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"We respect that we have two players in the market which have a strong role, and we feel ready to attack and have different offers to basically change the game plan on that one," Microsoft's CEO for China, Ralph Haupter, said in a statement.

Microsoft currently has about 4,500 employees in China. Last year, Microsoft spent $500 million on research in China. In addition, Microsoft wants to find more local partners to develop mobile applications in China. Also, Microsoft wants to expand its cloud computing business in China. Some 100,000 commercial customers use the company for private cloud computing. A public cloud computing service will be offered soon.

The news comes as Chinese search engine Baidu released a mobile browser this week. It will also soon open a cloud computing center.

There were 538 million online users in July in China – an 11 percent jump from 2011, according to data from the China Internet Network Information Center. By 2016, there will be between 350 million to 500 million smartphone users in China, The Wall Street Journal said.

The Android (News - Alert) OS was used on 76.7 percent of the nation’s smartphones during the recent Q2, according to Analysys International. Microsoft’s expansion in China comes with the release of the company's new Windows 8 operating system. It is seen as a rival to Apple's iPhone and iPad, and Google’s Android OS. On Wednesday, Nokia (News - Alert) presented new phones that run on Windows 8.

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