Microsoft plans to spend a billion U.S. dollars on research and development in China despite the global downturn.

Zhang Yaqin, Chairman of the company's China research and development group, said the money would be spent over the next three years and would "greatly boost information technology innovation in Microsoft and China.” The money will be spent on developing human resources and research and development.

It is a sign that Microsoft wants to expand its Chinese operations considerably.  The country has been a focus for some time now, but recently there have been other signs that Redmond is taking a closer interest in what is happening behind the bamboo curtain. 

Recently, it started clamping down on pirating as a precursor to pushing more sales. This cash was excluding money spent on mergers and acquisitions, suggesting Microsoft's investments in China could actually be even larger.