China to expand software outsourcing biz
June 16, 2005
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.
China's domestic software industry is bigger
than India's and hardware industry is much, much bigger than
India's, but they plan to build an even larger outsourcing
industry. India's software companies exported $17.3 billion
worth of outsourcing services in 2004, almost six times the
$2.6 billion generated by Chinese software exporters. China's
software outsourcing exports have been growing by more than
70 percent a year for the past three years and they believe
they can sustain this level of growth far into the future.
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. 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 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. China's software industry could grow even faster
if the government cracked down harder on piracy. China's software
industry has been hampered by piracy, which U.S. officials
say is the worst in the world. China's government said April
21 that it imposed almost 8,000 penalties and fines on copyright
violators last year. On Dec. 21, the government lowered the
threshold for prison terms and made piracy of intellectual
property punishable by as much as seven years in jail.
Source: http://sify.com
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