China's Xuzhou calls Indian IT firms

MUMBAI, INDIA: The Xuzhou Economic and Technology Development Zone (XEDZ) located in the Chinese province of Jiangsu, spread over 152.28 square kilometer area, is an emerging business outsourcing district. It has numerous advantages and is a comparatively low-cost destination against other business centers in the country, like Beijing, Hong Kong and Shanghai.

Developed jointly by Dalian Keypark Industrial Company Ltd. and BizPlus in cooperation with the local Chinese government, XEDZ offers all the key facilities and support necessary for science and technology businesses right from low-cost human resource to infrastructure to business-centric policies.

According to Liang Shu Feng, XEDZ Administrative Committee's vice chief director, the XEDZ has various advantages in terms of location, communication, high-speed connectivity to key cities, industrial development zone, qualified software engineers, low-cost human resource and overall favorable business and living environment.

Given the various advantages, Shu Feng said, “We are emphasizing on software development, outsourcing, research and development (R&D) businesses to come to XEDZ. Industries such as equipment-manufacturing, new energy and software service outsourcing are already been established here.” He told CyberMedia News on the sideline of XEDZ briefing in Mumbai recently.

It has a well-designed and planned software park with total 800,000 square metre area with key focus on six areas including software development, science and technology incubator, service outsourcing, cultural creativity center, exhibition center and talent apartment. Also, XEDZ has created a 10 million Yuan special fund for development and training talent.

Three key factors to drive Indian tech and outsourcing companies in XEDZ, according to Shu Fen, are: overall low cost of business including talent, large number of customers (companies) based in China and growing domestic market.

Now, with China becoming a major manufacturing hub with numerous foreign companies operating there, which are also clients of Indian IT firms, Shu Fen reckoned, “Indian IT companies can serve their clients more efficiently from the XEDZ.”

“We don't have any target in terms of the number, but we are targeting large Indian IT and BPO companies to come there because once these large companies shift there, small and mid-size companies will follow them,” Shu Fen opined.

Kaiyi, Herun Science and Technology, Venus Software and New Lixun are among the local tech and outsourcing firms operating there.

With 36 various state and provincial-level research institutions along with 76 university-level innovation centers, the zone has a strong supply pool of 32,000 talented English speaking certified software engineers to meet talent demand of tech and outsourcing companies. They also know and speak Chinese, Korean and Japanese languages, offering added advantage to outsourcing firms.

According to A T Kearney's Global Service Location Index — 2009, China is second to India in terms of financial attractiveness, people skill and availability and business environment.

Interestingly, it is claimed that HR costs in China is 15 per cent of the US, 17 per cent of Japan and 33 per cent of India. In China, among the 16 million college students that graduate annually, 30 per cent are software engineers..

Besides, the local government offers income tax exemption for three years for locally retained talent, rent subsidies to companies for three years and various other support to encourage businesses. According to NASSCOM, the business between India and China is expected to reach $1 billion in FY2011.