Tuesday, November 08, 2005

India-China Cross-Border Trade on the Rise

When we think of offshore outsourcing, we tend to think of it in terms of a developed country trading with a developing country, mostly on the basis of cost considerations. However, as China and India benefit from the offshoring boom -- the former in manufactures, the latter in computer-based services -- cross-border trade between the two countries is starting to boom. India-China trade reached $13.6 billion last year, which is a sevenfold increase from 1998. Writes Howard French of the International Herald Tribune/New York Times: "Companies in each country have explained their new investments as critical strategic moves aimed at profiting from each other's rapid rise." As wages in the Indian IT services sector continue to rise and top-notch talent is getting scarce (or at least scarcer than before), companies like Infosys, Tata Consultancy Services, Wipro, Satyam Computer Services have all begun to invest heavily in China. Infosys, for one, recently announced "plans to invest $65 million to expand its business in China, where it will hire 2,000 computer experts over the next two years and build large new corporate campuses in Shanghai and Hangzhou able to accommodate thousands more workers." Huawei Technologies, on the Chinese side, recently hired 700 software experts in Bangalore. "Chinese officials have also been beating a path to India in search of training and investment opportunities there. Infosys, for one, has recently accepted 100 Chinese interns at a corporate campus it maintains in the Indian city of Mysore. The Chinese province of Jiangsu also recently announced plans to recruit as many as 400 Indian software engineers to help it energize its provincial information technology sector."And the trend show no sign of abating. The full article is available here.

The article sponsored by A-1 Technology Inc, dealing in software outsourcing and application development outsourcing