Beijing is extending a warm welcome to Indian software and service suppliers, in the hope that they will set up shop in the lucrative information technology market of the nation's leading software hub.

Zhang Gong, vice-director of the capital's Municipal Development and Reform Commission, said: "We welcome Indian IT heavyweights to set up a base in Beijing or build joint ventures with Chinese software companies." India and China are both playing increasingly important roles in the international IT sector.

China is quickly climbing the global IT ladder and enjoys great potential in terms of the huge number of personal computer users and netizens, as well as its fast growing communications infrastructure.

Meanwhile, India is recognized as a major player in the international IT marketplace.

Beijing Software Industry Promotion Centre Deputy Chief Qu Lingnian said the Chinese capital, which accounted for one-third of the country's IT industry volume and 40 percent of the country's software exports last year, is one of the ideal choices for Indian software and service firms if they plan to enter the nation.

Qu is also the chief representative of the Beijing-based Sino-Indian Cooperative Office established last year.

Aimed at attracting Indian IT companies to China, especially to the capital, the office is the only one of its kind and there are no similar arrangements for any other country.

The United States took up 40 percent of the global US$750 billion of software outsourcing market last year, and the European Union accounted for 30 percent.

"India takes the leading place in this huge market. For instance, among the United States' US$20 billion offshore software outsourcing last year, Indian companies took between 50 and 60 percent.

"It is estimated that by 2007, US offshore software outsourcing will reach US$70 billion a year. Given the massive potential of this market, Indian IT companies also want to find a partner from potential competitors to ensure they get a slice of the action, and their most attractive candidate is China," said Qu.

(China Daily February 28, 2005)