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China wants its own Bangalore

Here’s an intra-continental irony - Mumbai wants to be Shanghai, but ‘Little Shanghai’ wants to be B'lore, reports Lalatendu Mishra.Check out graphics

business Updated: Feb 16, 2008 11:01 IST
Lalatendu Mishra

Here’s an intra-continental irony — Mumbai wants to be Shanghai, but ‘Little Shanghai’ wants to be Bangalore.

Wuxi, also known as ‘Little Shanghai, a mere 90 minutes’ driving distance from Mumbai’s dream city, is on a mission to transform itself into China’s information technology (IT) capital. For this, it is looking to take a leaf out of Bangalore’s book.

<b1>Wuxi, a city with a 3,000-year-old history, is determined to achieve this even though 13 other cities are racing to be known as China’s Silicon Valley.

“We are benchmarking ourselves with the best in India. Our objective is to make Wuxi our IT capital, even better than Bangalore,” said Yang Weize, standing member of the Jiangsu Provincial Communist Party of China Committee and party secretary in Wuxi.

Weize is part of a high-powered delegation that is in India to woo IT investment. For this, Wuxi has embarked on a strategy to scale up its technological knowledge. “We can be better than Bangalore if we go by the Chinese saying ‘Green has come out from blue, but it looks better than blue’,” Weize said. “Our youth are being trained as IT professionals to work in companies set up by Indian majors.”

Wuxi’s officials are in discussions with Infosys, Wipro, Tata Consultancy Services and others to set up hubs there. “We’ll keep at them till they agree,” Weize said.

He said Chinese students are fast learning English, crucial for IT, and will need a maximum of six months’ training to be employable in the sector. Currently, Wuxi has 10,000 trained software professionals and is aiming to churn out 50,000 a year within three years. For this, Wuxi has tied up with GNIIT, IT training pioneer NIIT’s global arm.

Bangalore’s IT leaders, though, are not too sure if their city’s magic can be recreated. TV Mohandas Pai, Infosys’ head of human resources, told HT: “It was a unique case of many things happening at the right time — not just infrastructure, but entrepreneurship, talent, opening up of markets — which contributed to Bangalore’s rise. There are about 6 lakh IT-business process outsourcing professionals in Bangalore. So, the chances of replicating its success are remote.”

Presently, 50 Indian companies, including a few Information Technology (IT) firms, are in Wuxi. Till the end of 2007, Indian companies had invested $14 million (Rs 56 crore) and the Wuxi-India trade volume was $1 billion (Rs 4,000 crore).
Though China is known as the world’s manufacturing hub, it trails in IT.

To catch up, China’s provinces are competing aggressively to woo Indian IT companies. The advantages cited are cheap manpower, affordable office space and tax incentives for corporates and top executives.

India, which has been on top of the IT heap for years, is finding its margins gradually squeezed due to rising manpower costs and a strengthening rupee. China believes that this could make it an attractive destination for India’s IT majors.