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Motorola, IT Giants Tally $2B in China Deals

Network and IT equipment vendors, who have been talking up the China market for years, are about to be rewarded for their bullishness.

On Tuesday, Chinese carriers and PC makers doled out contracts totaling $2 billion. The announcement came at a ceremony in Washington, D.C., attended by U.S. and Chinese government and business leaders.

The high-profile event may quiet complaints by U.S. lawmakers about the country's huge trade deficit with China, as well as the outcry over the shift of high-paying jobs to that country and others where skills are high and wages low, industry watchers say. Politics aside, the orders provide more momentum to the telecom sector that is rebounding after more than two stagnant years.

Whatever the motivation, Motorola is the biggest beneficiary of today's shopping spree, tallying more than $1 billion from two mobile carriers.

China Unicom will buy $556 million of equipment to expand its Code Division Multiple Access network. China Mobile will pay $510 million for gear to improve its Global System for Mobile communications network, including upgrades that will help it prepare for third-generation service.

Motorola has made significant investments in China, as a manufacturing hub and as a market to sell its products and it has reaped some orders. Earlier this year, it won an $80 million contract from China Unicom to expand a Code Division Multiple Access network.

China is attractive to Motorola and other wireless specialists for several reasons: a large population; a trade climate that appears to be gradually improving; and a relative dearth of wireline infrastructure, making mobile technology a logical choice for quick deployments of networks and services.

Several other firms will reportedly notch lucrative contracts with Chinese companies as well. Telecom gear maker UTStarcom , which makes network access equipment, will be awarded a one-year, $200 million deal with China Telecom, the Asia Times reported.

And Cisco , Lucent , Nortel and Ericsson are among others who will have representatives at the ceremony and are believed to be announcing deals Tuesday.

A spokeswoman for Murray Hill, N.J.-based Lucent declined comment.

Finally, Intel the world's largest chipmaker, is said to be announcing supplier deals with China PC makers Legend and Founder Technology Group.

In most cases, specifics of the contracts have not been revealed. More information is expected later today as industry and government leaders make news of the pacts public.