China a concern, not threat: Nasscom

China is unlikely to get ahead of India in global services sourcing in any significant manner over the next 3-5 years. "The Chinese information technology (IT) sector is a matter of concern for India. However, it cannot be considered a threat," said Nasscom President, Kiran Karnik, while releasing Nasscom's study titled 'Tracing China's IT Software Services Industry Evolution' here today.

The study reveals the IT-BPO industry in China is still in its early phases of evolution but has the potential to grow big. There is a strong case for increased partnership between the two countries as global corporations strive to strike a balance in their Sino-India co-sourcing models, states the report.

With a growth rate of 22 per cent, the Chinese software and services revenues is poised to reach $28 billion by 2010 "" including a domestic market at over $20 billion. Software and services exports from India, on the other hand, are set to reach $60 billion by 2010.

The scale of the overall sector in China, thus, is still less than a third of that in India. The domestic market accounts for over 85 per cent, making China's IT-BPO services exports less than a tenth of that from India.

Karnik suggested Indian expertise in the IT sector combined with manufacturing dominance of China could be a possibility for a partnership.

Nasscom has suggested that to cope up with the pressure that China may pose in the future, a favourable policy and tax environment, huge thrust in education and human resources, and vastly better infrastructure are pre-requisites.

Karnik also suggested an improvement in the security measures for the employees, stating that safety was a main concern for women. He also pointed out that the country did not have the facility to work from home, which was one of the advantages that helped China to boost its IT growth.


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