Infosys in China

The 25,000 sq. m. Shanghai Center required an initial investment of US$ 10 million. The Hangzhou center was to be constructed in an area of 100,000 sq. m. Infosys has chosen these locations as they have the required infrastructure and availability of talented people. The new centers were to undertake projects related to software development, IT-enabled services and IT services. Infosys planned to include training and research centers in these facilities apart from recreational facilities for employees. The investment of Infosys was one of the largest foreign direct investments from India into China. The revenues of ITSCo for financial year 2007-08 were projected at US$ 50 million. Infosys hoped its Chinese operations would contribute 10% of its total revenues by 2015...

While in 2004 the salaries for IT professionals in India were up by 15-25% on the previous year owing to the 30% growth in the demand for IT services, in China, the salaries in this sector grew only by 4% in the same year. According to an analyst, "India's advantage has always been the large pool of inexpensive, English-speaking talent. But now salaries in India are jumping at 25 percent or more annually.

So India's cost advantage may not endure. We don't see that in China yet. BearingPoint Inc. opened its office in Shanghai, as it found that manpower costs in Shanghai were 40% lower than in Bangalore...