By Bernama,
Dalian : Inspired by Bangalore, India’s ‘Silicon Valley’, Dalian, a city in north-east China has set for itself an ambitious target of becoming world’s top Information Technology (IT) centre within a decade, Press Trust of India (PTI) reported.
A scenic coastal city set among green hills, Dalian has already attracted a large number of international and local corporations to set up regional bases for Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO) services.
Among these are 34 Fortune 500 companies.
“By 2017 or 2018 we hope to be a peer with Bangalore and Silicon Valley (of America),” said Dalian Mayor Xia Deren.
“We are striving to be the No 1 software centre in both China and the world,” Xia told reporters ahead of the China International Software and Information Services Fair (CISIS) 2008, which ended on June 21.
The annual event saw participation from some top-notch companies like SAP, Neusoft, Ericsson and Microsoft.
Software export from Karnataka (mainly Bangalore) was worth Rs 54,000 crore (US$12.6 billion) in 2007-08, up from Rs 48,600 crore (US$11.3 billion) in the previous year.
As compared, in 2007, the software export exceeded US$700 million in Dalian, which had a workforce of 60,000 people and was home to nearly 700 IT/BPO enterprises.
As many as 50 multinationals among Global 500 have set up software R&D and service institutions here, a feat not achieved by any other Chinese city.
It holds a unique position as the only software outsourcing international model city in China, a country where according to research agency IDC, IT market is estimated to cross over US$150 billion in 2008 and US$200 billion in 2010.
Dalian is within an hour of flying from Beijing, South Korea and three hours from Japan. It ranked fifth as Asia-Pacific’s top IT outsourcing destination in a survey by IDC Corp in July last year, coming behind Bangalore, Manila,Delhi and Mumbai.
In view of the city’s booming market, it is predicted to be the top IT service centre in North-east China, dominating about 40 per cent of the whole output in the region.
Further pushing the case is ‘Dalian Tiandi Software Hub’, a mega IT park being developed by leading Chinese property developer Sui On Land Ltd and its two other sister entities, Yida Group and Shui On Construction and Materials.
The hub, spread over an area of 26.5 sq km, would see an investment of US$ 2.5 billion and the first office building is expected to open in December 2009, said Sui On Land Chairman Vincent Lo.
It would have residential apartments, shopping malls, IT training schools and R&D facilities, he said.
India’s leading IT education company NIIT Ltd has signed a memorandum of understanding (MoU) to set up its centre in the software hub, which is being touted as largest in Asia.
“The NIIT centre would train around 1,000 professionals in the first year of operation. We aim to scale it up to 10,000 in three years,” said NIIT President Prakash Menon.
Dalian enjoys various advantages over other Chinese cities. Besides Chinese, the city has a large number of people fluent in English, Japanese and Korean languages, the labour cost here is lower than Tier I cities like Beijing and Shanghai.
Besides, it has good access to major cities in East Asia and is home to several universities which ensure good supply of graduates, said Genpact China Chief Executive Mitsuru Maekawa.
The local municipal government is offering an attractive set of preferential tax incentive and talent policies in facilitating continuous growth of the IT industry.
The city government has supported us with various tax benefits and training funding besides developing software parks, said Mekawa.
According to a 2007 study by IDC, top Indian off-shoring destinations like Bangalore, New Delhi and Mumbai are in danger of being eclipsed by Chinese cities of Shanghai, Dalian and Beijing as favoured centres for outsourcing.
Indian cities are highly ranked on global delivery index (developed by IDC based on parameters like cost of labour and rent, language skills and turnover rate), while Chinese cities are on the rise and closely nipping at the heels of their Indian counterparts, the study said.
Some of the reasons for this are China’s massive investment in physical as well as human infrastructure and emphasis on foreign languages, especially English.