Port city now also a hub for software and IT

The port city of Dalian in Liaoning province has taken long strides in its quest to become the leading software outsourcing service center in the country, Mayor Xia Deren said early this month.

"The central government has laid out a strategic plan for the growth of the software development and outsourcing sector," the mayor told China Daily. "Dalian should play a leading role as it has many advantages in terms of IT industrial scale, infrastructure and its talent pool."

Xia's remarks came as he attended the ongoing session of the 11th National People's Congress in Beijing.

Dalian's total software sales reached 21.5 billion yuan in 2007, Xia said, compared with 200 million yuan in 1997. Its software exports were valued at $720 million last year.

Thirty-three Fortune 500 companies have operations in the city, adding to the more than 700 IT-related establishments that together employed more than 60,000 workers last year.

Dalian's efforts are also gaining worldwide recognition. According to the latest index released by the US-based International Data Corp, Dalian now ranks fifth globally in the sector.

"We are qualified to become the champion in the software development and outsourcing sectors in China and one of the key software outsourcing centers in the world," the mayor said.

Dalian drew up a strategy much earlier than other domestic cities to develop the IT industry, beginning construction of the Dalian Software Park in 1998 to revitalize its economy with the then-new environmentally friendly industry.

The park is designed to host IT operations that are moved from more expensive developed countries. In the beginning, it focused on the Japanese market.

When GE, one of the world's leading data service suppliers, and Neusoft, China's top software developer, established operations in the park, half of the world's top-10 information technology outsourcing and business process outsourcing (BPO) service suppliers later followed their example.

"When the world's giants arrived they gave a strong impetus to the development of the sector in the city," Xia said.

Companies such as IBM, Oracle and Accenture now have operations in the software park, helping Dalian become more internationally recognized.

In September 2007, Dalian served as the Asian host site for the World Economic Forum (WEF), one of the world's most important gatherings of global business leaders, who said they were impressed with the rapid growth of the port city's IT sector.

"Dalian is a clean and beautiful city and it's also a champion city in the IT industry," said WEF Chairman Klaus Schwab.

"Many of the friends I met early this year when I attended the WEF in Davos, Switzerland, talked with us about the sector in our city," Xia said.

"No other industry than the IT sector could upgrade the city's reputation so much and make it accepted by the world," he said.

Industrial park

To meet the sector's rapid growth, the city set aside 100 sq km of land in 2003 for construction of Dalian Software Park's second phase along South Lushun Avenue, a scenic seaside area in the city's suburbs. A number of IT industrial sites have since opened along the avenue.

One is Dalian Ascendas IT Park's first-phase project that became operational last September. The 35-hectare facility is a joint venture between Dalian Software Park and Ascendas, Asia's leading business solutions provider.

Construction began the same month on the Dalian Tiandi Software Hub, 15 billion yuan joint project between the Dalian Software Park and Hong Kong-based Shui On Group. When completed, the park will include office buildings and residences along with recreational and educational facilities.

Neighboring it are the Dalian Neusoft Software Park and Dalian Hekou Software Park, construction on both of which is now well underway.

Dalian expects its software sales value to reach 85 billion yuan and have a yearly export value of $4.5 billion in 2012, by which time the industry will have created 200,000 new jobs, according to Dalian Bureau of the Information Industry.

Private domestic enterprises have also played a key role in the development of the city's software and IT service sectors, the mayor said.

In fact the developer of the park itself, Dalian Yida group, is a private company that has invested more than 10 billion yuan in the project over the past 10 years.

Another private firm, Dalian Hi-think Computer Technology Co Ltd (DHC), supplies software and BPO services to hundreds of clients in Japan, the United States and Europe.

DHC's software export volume ranks the first in the nation and has maintained an annual increase of 25 percent over the past 10 years.

Large projects to come

The world's top computer chip maker Intel is now building a $2.5 billion factory using nanometer technology to make computer chipsets in Dalian. "There is no doubt that Intel first took into account the huge market in China for the establishment of a factory, but the city's achievements in the IT sector is part of the reason they chose Dalian," the mayor said.

"More and more global giants will follow Intel's step to invest in Dalian and greatly boost the growth of our IT industry. What we have to do is to try our best to offer excellent service to them," he said.

Another key task for the municipal government is to enhance IT training and keep a steady inflow of talented professionals to the city to meet increasing demand from the sector, the mayor said.

(China Daily 03/18/2008 page16)