China starts IT services push

All it takes to understand China’s growing ambitions in the offshore market is to watch Jin Cao’s slide show of numerous large office complexes nestled in comfortable office parks.

Multinational companies that opt to locate offshore facilities in these office parks will also get access to a wide range of government-backed services, including recruitment assistance, bilingual schools and other support facilities, including golf courses.

According to Cao, U.S.A. director of the Dalian Software Park in northeastern China, the government is developing software parks to serve as centres for offshore IT development and business process outsourcing operations. They will also serve as “captive centres” that house offshore facilities owned and operated by foreign firms, in addition to China’s own offshore companies.

The push is heavily backed by the Chinese government, which hopes to lessen its dependence on foreign technology, develop a domestic technology market and drive its own brands internationally, said attendees at a China IT services conference here.

China doesn’t have a big share of the international offshore market; the majority of its services revenue, 85 percent, comes from the domestic market. International offshore revenues last year were about $600 million, said Walter Fang, vice president and chief technology officer at Neusoft Group Ltd. in Shenyang.

But Fang predicts expansion in China, particularly as the nation enters the World Trade Organization, hosts the 2008 Olympics, and sees a boost in IT spending by the Chinese government.

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