Each of the equity pledge agreements between Baidu Online and the nominee
shareholders of Beijing Perusal and BaiduPay contains substantially the same terms as those described above.
We are in
the process of perfecting the equity pledges of Baidu Netcom and BaiduPay described above by registration with the relevant local administration for industry and commerce as required for a property right under the PRC Property Rights Law, due to a
recent increase in the registered capital.
Through the design of the aforementioned agreements, the nominee shareholders
of these affiliated entities effectively assigned their full voting rights to Baidu Online, which gives Baidu Online the power to direct the activities that most significantly impact the affiliated entities economic performance. Baidu Online
obtains the ability to approve decisions made by the affiliated entities and the ability to acquire the equity interests in the affiliated entities when permitted by PRC law. Baidu Online is obligated to absorb a majority of the expected losses from
the affiliated entities activities through providing unlimited financial support to the affiliated entities and is entitled to receive a majority of residual returns from the affiliated entities through the exclusive technology consulting and
service fees. As a result of these contractual arrangements, Baidu Online is determined to be the primary beneficiary of these affiliated entities. Despite the lack of technical majority ownership, there exists a parent-subsidiary relationship
between us and these affiliated entities through these contractual arrangements, and we consolidate these affiliated entities through Baidu Online.
We have also entered into contractual arrangements with several other affiliated entities and their respective nominee
shareholders through our subsidiaries other than Baidu Online, which results in these subsidiaries being the primary beneficiary of the relevant affiliated entities. As a result of these contractual arrangements, there exists a parent-subsidiary
relationship between us and the relevant affiliated entities, and we consolidate these affiliated entities through subsidiaries besides Baidu Online.
Property, Plant and Equipment
Our corporate headquarters, Baidu Campus, is located in Shangdi, an area designated by the Beijing municipal government as the
center of the citys information technology industry. We also own another office building, Baidu Science Park, in Beijing. Besides Beijing, we own and occupy office buildings in Shanghai and Shenzhen.
We also lease some offices in Beijing, Tokyo (Japan), California (USA), Thailand, Brazil, Egypt, Indonesia and many other
cities in China.
We host our servers in China at the internet data centers of China Telecom, China Unicom and China
Mobile in ten selected cities in China, and we also have content delivery network locations in various cities across China. We plan to deploy two additional data centers in 2017. We also have a data center of our own in Shanxi and plan to build
another one in Beijing, the first stage of which was completed in the first half of 2016.
In December 2011, we commenced
construction of an office building in Shenzhen, which will serve as our international center in Southern China. Our capital expenditure in connection with the construction of this office building in Shenzhen was RMB128.3 million (US$18.5
million) in 2016. We currently expect to complete the planned construction in 2018.
In September 2012, we commenced
construction of Shanxi Cloud Computing Center, which will serve as one of our internet data centers in China. Our capital expenditure in connection with the construction of Shanxi Cloud Computing Center was RMB324.6 million (US$46.8 million) in
2016. We expect to fully complete the planned construction in 2018.
In April 2014, we commenced construction of part of
Beijing Cloud Computing Center, which will serve as our internet data center in Beijing. Our capital expenditure in connection with the construction of Beijing Cloud