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Indian IT companies want share of Chinese boom
Monday, 12 July 2004, 19:30 IST
SHANGHAI: Indian IT companies are increasingly setting up shop in China, lured by its infrastructural advantages, as Asia's two most populous nations, who have viewed each other as rivals in the past, see complementarities in cooperation.
Indian companies like Infosys feel that as the global customers become more and more cost conscious, China could emerge as a seriously challenge to India's current predominance in this field.
Infrastructurally, China today has a lot more options to offer, particularly because of the good linkages between rural and urban areas that will make the country more attractive to clients, according to K.S. Suryaprakash, head, delivery operations of Infosys Technologies (Shanghai) Company Limited, a fully owned subsidiary of the Indian IT major.
"Only India today offers cost, quality and scale. It is there in China too, but not the same way as in India.
"As days go by, China's cost will come down whereas India's will go up because of lack of infrastructure in the rural areas," Suryaprakash told IANS.
"Now all IT companies (in India) are going into same cities, adding to the costs," he said.
Noting that owing to the need for risk diversification and cost factors the current is definitely in favour of China, he said, "We want to be part of it."
Other nations -- Ireland, Philippines and some of the East European nations -- collectively known as the 'Challenger Countries' are also vying to be the top IT hub, but China is the only country which can offer cost scales comparable to India.
"When you look at the global off-shoring market, India covers 75 percent and we are definitely the leader, but China is fast catching up," Suryaprakash said at the Infosys office in the Pudong Software Park in this sprawling city of skyscrapers and towers that is a showpiece of modern China.
China is aware that while it is strong in hardware India is miles ahead in software. And the industries in both countries appear to have come to realise that a marriage of their capabilities would be mutually beneficial.
Infosys set up its unit here about eight months ago following a personal invitation to the company by then Chinese premier Zhu Rongji during a visit to Bangalore two years ago.
Besides Infosys, there are four other Indian IT companies, including Tata Information System, which have set up units in Shanghai, and more are said to be coming.
Like India, China, the fastest growing economy in the world, offers cost advantages, besides a growing software market and a reasonably large number of software engineers.
While the Indian companies have been largely export-oriented, having developed a reputation for quality and reliability, the 6,500 odd Chinese software companies largely focus on the domestic market.
Like Hu Xin Zhen's Shanghai Ehong Electronic Commerce Limited, a $2.2 million company specialising in software for the seven major pharmaceutical companies in China and 1.25 million wholesalers and retailers.
Hu, who is the chairman of the company, had little formal education. "I don't know much about computers but I know a lot about the industry," he said, a claim substantiated by his company's success.
According to Suryaprakash, project management, quality control and the English language are India's strong points.
But he said there is need for Indian companies to look at alternative hubs. As the 'Challenger Countries' catch up with India, Indian companies will either lose their clients and business to other countries.
One serious handicap for the Chinese software industry in going global is the lack of enough English-speaking people. "There are bright people here but English is not their focus," said Suryaprakash.
So, Infosys, which has only seven or eight Indians among its staff of 25, the rest being Chinese, have put up large Donald Duck posters all over the office with English primers and their Chinese translation.
"You have to simplify your English, but they are fast picking up," he said.
Source: IANS
Source: IANS
