Huawei, China's largest networking equipment maker, joined with US corporation 3Com in a global JV deal.
Huawei will provide most of the staff and the manufacturing and 3Com will invest US$160 million, provide various patents and licenses and take a 49 percent stake, rising to 51 percent after two years.
The JV will manufacture and sell under the Huawei-3Com name in China and Japan and use the 3Com name in other markets.
Huawei has been embroiled in an intellectual property court case with Cisco and 3Com has seen falling sales for 17 consecutive quarters.
The new alliance is hoping to challenge Cisco's dominance in the switch and router business. Cisco's 60 percent share of the US$1.6 billion market in China was still only 5 percent of its global sales last year.