"Knowledge is the new principal commodity," Intel chairman Craig Barrett said Wednesday in Beijing. He declined to give a value for the investment. "Education is the key for any nation's competitiveness," he added.

Under the agreement, Santa Clara, California-based Intel will donate more than 10,000 personal computers to rural schools by 2008, and help train one million teachers, who will in turn help educate more than 100 million students by 2011, the company said.

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Intel joins companies including Microsoft Corp in wooing the 800 million rural residents in the world's second- biggest PC market.

Intel's agreement in China is part of the company's "World Ahead" program announced in May to invest US$1 billion (HK$7.8 billion) globally over the next five years to speed access to technology and education for people in developing nations.

PC sales in China, the world's fastest-growing major economy, will rise 16 percent to US$15.1 billion this year, compared with a 6 percent gain to US$67.4 billion in the United States, according to researcher IDC.

Intel, whose semiconductors power more than 70 percent of all PCs, employs 6,800 people in China at four research and development centers as well as a test and assembly plant in Shanghai and one in the southwestern city of Chengdu. The company has invested more than US$1.3 billion in China since 1985, when it began operating in the country.

Barrett signed an agreement Monday in Zhanjiang in Guangdong province to help equip 105 rural hospitals and clinics within the next two years. Barrett will be in India today and tomorrow. Intel shares rose 8 US cents to US$21.34 Tuesday in Nasdaq composite trading. BLOOMBERG