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News >> Technology >>
China guns for Indian IT
By agencies
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Wednesday, 15 June 2005, 19:30 IST
BEIJING: China aims to grow its $2.6 billion software outsourcing industry as much as six-fold to rival that of India's in the coming five years, a senior official with the Chinese Ministry of Information and Industry said.
``Our domestic software industry is bigger than India's and our hardware industry is much, much bigger than India's, but we plan to build an even larger outsourcing industry,'' Zhang Qi, director-general in charge of software development at the ministry, said at a conference in Beijing.
China's cabinet, or State Council, issued a series of policies earlier this year that will offer tax incentives to Chinese software companies that sell outsourcing services overseas.
``Our software outsourcing exports have been growing by more than 70 percent a year for the past three years and we believe we can sustain this level of growth far into the future,'' Zhang said.
Ken Wasch, president of the U.S.-based Software & Information Industry Association, agreed.
``There are fundamental shifts in the way software is being developed globally and the opportunities for Chinese companies to grab global market share are enormous,'' he said. ``The back-end of software services can be hosted in Beijing, Harbin or Shanghaias easily as they can be hosted in San Francisco or San Jose, and for much less cost, too.''
China's 8,700 software companies generated 220 billion yuan ($26.6 billion) of revenues in 2004, with exports making up only 10 percent of the total, according to the ministry of information industry.
Software revenues have been growing at more than 30 percent a year for the past five years, with 2004 growth reaching 34.7 percent, according to data provided by the ministry.