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India's Tata to set up in China
Top software exporter looks to Beijing...

By Reuters

Published: Thursday 30 June 2005

India's Tata Consultancy Services is to set up a joint venture in China to provide services to global companies and the local Chinese market.

Tata, India's top software exporter, will hold a majority stake in the venture, according to the company. Microsoft, China's Uniware and two Chinese software parks will be minority shareholders.

The joint venture will be located in Beijing's Zhongguancun Software Park and will start operations in early 2006.

Tata said in a statement: "The key objective of this global initiative is to build the new venture as a role model for the growing Chinese software industry."

China, whose exports in software and back-office services total less than one-fifth of India's $17.2bn, is boosting English-language skills in schools to help mount a challenge to the software campuses of Bangalore.

When Chinese Premier Wen Jiabao visited India's technology capital in April, he said the two countries could team up to become world leaders in IT.

Shang Gong, vice director general of the Beijing Municipal Development and Reform Commission, said in the statement: "The success of the co-operation will help accelerate the development of China's - including Beijing's - software industry."

Tata already operates in China through a subsidiary with 250 employees set up in 2002.

Rivals Infosys Technologies and Wipro have also set up in China, aware of the threat the country poses to India's prowess in offshore software work.

To hedge against over-dependence on India, some of the world's top banks have already begun developing software in China.