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Chinese-Indian IT venture launched

By Wang Xu (China Daily)
Updated: 2007-02-14 08:40
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India's biggest IT company, Tata Consultancy Services (TCS), officially launched a joint venture inBeijingyesterday and announced a contract with China's Foreign Exchange Trade System (CFETS), a part of the central banking system.

The joint venture in Beijing's Zhongguancun Software Park will provide IT services to China's domestic market, as well as Europe, the United States, Japan and the rest of Asia, the company'sCEOsaid.

"The joint venture will help create a large-scale offshore base and increase the scale of our business here," said S. Ramadorai, TCS's managing director and CEO, at a press conference in Beijing.

Chinese-Indian IT venture launched

Tata Consultancy Services Managing Director and CEO S. Ramadorai at a news conference in Beijing yesterday announcing the launch of a joint venture.

The first Indian outsourcing company to operate in China, TCS now has 800 consultants at its centers inShanghaiand Hangzhou. With the new venture in Beijing, the company expects to increase its work force to at least 5,000 over five years.

"China's domestic market offers great opportunity for us, especially the recently relaxed banking sector," said Johnson Lam, CEO of the joint venture, noting that 43 percent of TCS total revenue comes from the financial sector.

TCS said it will implement a comprehensive trading system for CFETS, the official market for interbank trading and foreign exchange. The company declined to reveal the value of the contract.

TCS and International Business Machines Corp said on February 8 that they won a $100 million deal to upgrade the computer systems atBank of ChinaLtd.

China's banking sector has become an important new client for global IT consultancies as lenders invest heavily in technology to improve risk management and tighten control over branches. Domestic banks are also facing increasing competition from overseas counterparts such as HSBC Holdings Plc and Citigroup Inc.

TCS and its Chinese partners announced the joint venture in late 2005 and later Microsoft said it would be a strategic investor in the company.

TCS Asia-Pacific owns 65 percent of the venture. Beijing Zhongguancun Software Park Development Co Ltd,TianjinHuayuan Software Area Construction and Development Co Ltd and Uniware Co Ltd each hold 25 percent, with Microsoft expected to take the remaining 10 percent.

Indian software giants have been bulking up their operations in the country in recent years to meet a shortage of technical staff. As multinational companies continue to flock to China, the demand for IT expertise provides a new revenue source for Indian software giants.

Satyam Computer Services, India's fourth-largest software exporter, said it plans to increase its presence in China to more than 3,000 professionals by 2008.

Infosys said earlier it will invest $65 million in China by 2010 and increase its staff numbers in the nation to 6,000.

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