Microsoft will hire 1,000 staff in China over the coming year, a senior executive has said.
The move is aimed at strengthening the company's position in a market it sees as key to future growth, but where software piracy and regulation remain serious hurdles.
The new employees will be added in research and development, sales, marketing and services, said Ralph Haupter, CEO for Microsoft's Greater China operation, speaking to reporters in Beijing.
The expansion comes as part of a sales and marketing effort by Microsoft that aims to reach potential Chinese customers such as local governments and public institutions, said Haupter, who was appointed Microsoft's China chief in April.
The Seattle-based software giant has struggled to establish a foothold in China's IT market, where consumers can easily buy pirated copies of its software.
In January, it sued Gome Electrical Appliances Holding, China's biggest homegrown electronics retailer, for installing pirated versions of its software on PCs.
Microsoft plans to boost China research and development spending by 15 per cent over the next year, said Ya-Qin Zhang, chairman of the company's Asia Pacific R&D group.
The company currently spends $500 million annually on R&D in China.
The new jobs will bring the size of Microsoft's China workforce close to that of its Indian operations, where it employs 5,800 people across its business units.
The company is also building a large cloud computing center in Shanghai that will employ around 600 people, said Zhang.
Microsoft, facing a stagnant global PC market, reported its first quarterly loss as a public company in July, though revenues held up better than analysts expected.