No one can deny that China's economic success story in the past three decades has largely relied on its manufacturing clout. The country has been churning out Made-in-China products every day and exporting them to every corner of the world.

China's success story is also largely due to its readiness to learn advanced Western technoligies and practices.

"As China continues down the path to the development of a knowledge economy, partnership with the international community and multinational companies will continue to be very important," said Ya-Qin Zhang, corporate vice-president of Microsoft.

"Microsoft is committed to building a healthy IT ecosystem that will foster a strong knowledge economy and deliver a win-win for China and the IT industry."

Over the years, Microsoft has created a partner ecosystem that has had a significant impact in China, Zhang said. According to a recent report from research house IDC, for every dollar Microsoft generates in revenue in China, $16.89 is generated for partners.

CRD could be a success model for local companies and it should not take too long for local companies to copy its success story, Zhang said.

CRD was formed in 2006, comprising several Microsoft research facilities in China with an annual budget of more than $200 million.

"Traditionally, we have seen a lot of outsourcing taking place in China, where teams of engineers have built software based on specifications or they have localized innovations created in other countries," said Zhang. 

"Today, at CRD, we have moved beyond this localization and outsourcing model to a point where we are innovating products in China for the world. Many of our partners in China have gone through the same evolution."