15) Dalian Software Outsourcing Industry of Dalian aiming at the western countries

Software outsourcing industry in Dalian is currently very bullish on American and European markets after taking the lion's share of the Japanese market. The intension may turn out to be hard, for Dalian will vie with India for American market.

Dai Yulin, vice-mayor of the port city in northeast China's Liaoning Province, said that although up till now the city’s authority has not drawn up the detailed strategy, it will inspire enterprises in Western parts to start taking measures to make a study on the newest trends of offshore outsourcing market.

"While the European and American market is challenging, we still possess strengths for the Japanese market… and unlike India, we don't pocess a competitive edge in terms of language, price, technology, scales and service.“Li said.

"The greatest challenge lies in employing new staff and growing computer expertise to vie with," he said, emphasizing: "As America has a more advanced standard in terms of outsourcing, we still have a long way to go as far as ability improvement is concerned".

Dalian, the capital city of offshore software development in China, has succeeded in offering IT services and software to all kinds of corporations, mostly in Japan. It provides the most offshore software outsourcing services to corporations in Japan in China.

Last year, the software sector sales in Dalian created an unprecedented record of ten billion Yuan, keeping a 60% rise in the last 6 years and growing fifty times from 8 years ago.

Software outsourcing’s sales devoted 3.7 billion Yuan, of which Japan outsourcing deals formed at least 80%, and the rest came from Europe, the US and countries in Southeast Asia.

"However, it may be complex to fascinate US clients as they are ‘mature’," said Li. "Both markets (US and Japanese) are in possession of disparate operation models".

CCID consulting statistics show that Japanese companies made good use of 60% of Chinese software outsourcing services in the six months of 2005.

Nevertheless, Japan-oriented business covers 10 per cent of the global market and is still paralleled other countries.

Despite of intense competition, aiming at greater profit, this market is drawing the attention of outsourcing service providers in China.

The general manager, Mr. Liu Jun in Dalian High-Think Computer Technology Co Ltd said, in comparison with Japanese and European business models, the US possesses a more advanced standard in terms of outsourcing.

"We still need strengthen our ability," Liu said in confidence. "For their part, the software outsourcing services for European countries and the US just accounts for 2% to 3%. We need to reserve as well as accumulate; we need three years at least to expand into the market."