China exported software worth of US$610 million in the first ten months, more than 80 percent of which was made by foreign companies operating in China.

Customs statistics released here Thursday show that the value of national software exports rose 30.7 percent year-on-year but the proportion from private local companies dropped in the period.

Foreign-funded companies recorded software exports of US$500 million in the Jan.-Oct. period, up 40.4 percent year-on-year. The figure from private local companies declined 9.3 percent to US$60 million, according to customs statistics.

In the press release on its website, China Customs attributed the bad performance of local companies to their small scale and lack of competitiveness in the international market.

Another problem that baffles the Chinese software industry is that the target market of exports is highly concentrated in Japan, which absorbed US$390 million, or 63.9 percent of China's software exports in the first ten months.

Experts predicted that the global IT outsourcing market will reach US$100 billion in 2007, most of which will come from the European and US market.

"Only by breaking into the mainstream software market could Chinese export-oriented software companies gain the foothold in the global software outsourcing market," according to the press release.

Customs statistics show that China's software exports to the United States and Hong Kong only stood at US$70 million respectively in the Jan.-Oct. period. No figures for the European market are provided.

Beijing, Shanghai and northeast China's Liaoning Province accomplished 80.7 percent of the national software exports in the first ten months, according to China Customs.

(Xinhua News Agency December 1, 2006)