Governments Step In To Assist Sino-Indian IT
JVs
The Chinese and Indian governments are stepping in to
assist their local companies to partner with each other
to develop new joint ventures in the information technology
field.
Indian companies have traditionally been strong in IT
services, having accrued considerable experience in supporting
US Silicon Valley firms. Chinese companies have been traditionally
strong in hardware engineering and manufacture. Up until
now, only a
few companies have been able to partner effectively
with each other.
Now, with the pickup in demand for outsourced services,
as well as strong Chinese domestic demand, the case for
Sino-Indian
JVs has become clearer. Both Chinese and Indian companies
are at a disadvantage when establishing new international
brands for their products and services; it is hoped that
they can help gain a foothold by partnering with each
other.
To assist companies on both sides, the Chinese and Indians
have formed government delegations comprised of several
leading Chinese software parks and hardware manufacturers.
Software parks are government-funded development areas
where software companies are invited to situate their
China development operations. Leading hardware manufacturers
which are participating on the Chinese side are Huawei
Technologies and Maywide Technologies. All are from Guangdong
province in southern China. Southern China has taken an
economic hit lately because of labor
shortages and have formed an administrative-level
group to foster cooperation and investment in the
area. One of the areas of focus is fostering JVs which
are based in southern China, which is closer to India
than northern China.
Companies participating on the Indian side are Tatas,
Cosmos and CMC.
Although China and India are neighbors, relations between
the two countries were rocky until 10 years ago. The two
countries fought a brief border war in 1962, and China
has traditionally allied itself with Pakistan. Recently,
however, new governments have shifted from a political
foreign policy to a more economically focused foreign
policy.
The Indian economy has also enjoyed strong growth and
the growth of a middle class, which has brought prosperity
to India's major cities.
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