Microsoft has agreed to buy $700m worth of Chinese hardware in a five-year deal.
Redmond will also give $200m to the National Development and Reform Commission, which invests in China's software companies and enhances technical cooperation and training.
The deals have been made following a trip by Chinese president Hu Jintao to America, during which he spoke highly of Bill Gates and openly welcomed an increase in Microsoft's investment in his country.
"I admire what you have achieved at Microsoft. Because you, Mr Bill Gates, are a friend of China, I'm a friend of Microsoft," said President Hu.
Microsoft will also benefit from the relationship, following a deal announced last week that will see Chinese manufacturer Lenovo buy $1.2bn worth of Windows software over the next 12 months.
Lenovo will preinstall the Windows software on its PCs, which Microsoft hopes will cut the amount of pirated copies of its operating system within China.
Three other Chinese PC manufacturers also plan to buy $400m worth of Windows software.
French firm Blade offers a Windows 10 PC in the cloud, but is it good enough for high-end gaming?
Research into indium gallium phosphide could result in more powerful - and cheaper - electronic devices
Federal government to help US states improve their election infrastructure security
Acton's warnings come as Facebook is embroiled in one of the biggest data scandals in history