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Shanghai's Software Exports Set to Expand
Exports of software manufactured in Shanghai are gaining momentum thanks to growing global demand for software solutions combined with strong financial and tax incentives provided by the city government, which have strengthened the industry's business structure.
Software exports from Shanghai hit US$50 million last year, topping experts' forecasts. They are expected to jump to US$80 million in 2001.
An improved business structure is the force behind the growth, according to Wang Deming, general manager of the Shanghai Venus Software Co Ltd, one of the largest software exporters in China.
In the past, local software exporters made a large proportion of their money by sending their own experts overseas to do commissioned work. Now, thanks to changes in the structure of the industry, the companies do a majority of business through software development contracts and subcontracts with global companies.
Until recently, 20 per cent of the industry's export revenue came from contracts while 80 per cent came from the export of software whiz kids. Those numbers have now been reversed.
"Right now, 80 per cent of our export revenue comes from contracts while 20 per cent comes from the export of software experts. This is a big improvement that has helped build up our global competitiveness," Wang explained.
Han Shenyao, vice-president of the Shanghai Huateng Software System Co Ltd, another leading software company, agreed.
Han's company has decided to develop its own software solutions for the global market so that it can build a brand name in the United States and Japan, where the two largest software markets reside.
"Without a brand name, we can't compete with strong global players in India and Ireland," said Han.
Until recently, however, a lack of mass-production capability coupled with a huge shortage of capital and talent has made it difficult for local software players to keep up with overseas rivals.
Source: chinadaily.com.cn
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