Microsoft Corp has signed a memorandum of understanding with China's Ministry of Information Industry (MII), under which it will set up Windows .NET-based technology laboratories in China.

The project is to help software and chip companies develop applications based on its software platform. Microsoft said it will provide software and hardware equipment, technical support and training valued at no less than $10m over the next two years in order to support partners and local software companies in their research and application development efforts.

The Microsoft laboratories will form part of China's National Software and IC Public Service Platform, a government-backed institution aimed at nurturing development of China's domestic software and IC industries. The labs will develop and test local applications based on Microsoft operating systems and demonstrate local solutions based on Windows and .NET technologies.