Tata Consultancy Services, India's only billion dollar software services company, plans to hire nearly 150 programmers by the end of the year for its development centers in China. By 2005, the company hopes to take the number to 3,000.

Almost 70 percent of these new hires will be Chinese and made from the local pool of programmers.

Currently, TCS has a little over 100 people working in its Chinese centers. Seventy-four of these programmers are locally hired Chinese; the rest are Indians, mostly at the managerial level, a mix TCS is likely to retain while expanding operations.

"Our strategy has always been to recruit locally. Wherever we go we ensure we hire local people. It is a key to leveraging the talent pool that exists in that country," says Atul Takle, Vice-President (Corporate Communications), TCS.

TCS' operations in China is little over a year old. In June 2002, the company announced it would set up a wholly-owned subsidiary called the Tata Information Technology (Shanghai) Company Limited. The subsidiary is
headquartered in Shanghai.

Apart from this, it set up a marketing office in Beijing to cover client relationship management, public relations and legal areas, in addition to providing support to clients in northeast and northwest China.

Its development center in Hangzhou provides services for clients in the Asia Pacific region in coordination with TCS delivery centres in India.

Over the last year, TCS has focused on developing its presence in the Asia Pacific market which contributes over 5 per cent of its overall revenues. TCS has sales offices in Korea, Taiwan, Japan, Hong Kong and Singapore, where it has its Asia Pacific headquarters.

Building a strong development center in China is a way for the company to ensure it retains its global clients who are expanding in the Chinese market.

TCS provides IT services for eight of the top 10 Fortune companies. As those companies expand in China, TCS sees its move into the Middle Kingdom as a way to stick with those clients and retain them, while adding to its bottom line.

"We want to be close to our global clients for their plans in China. Almost all the companies on the Fortune 500 list are big in China too," says Takle.

One of its biggest clients is GE Medical Systems which provided TCS the launch pad for its entry into the Chinese market. TCS also recently bagged a project for the Shenzen Development Bank in China. The company declined to reveal the size of this project.

China's domestic IT market is the second leg of TCS' China gameplan. To get a greater foothold, TCS has entered into an alliance with two Chinese companies: Zoom Network for IT and telecom and eBIS, a financial services provider whose client list includes leading State-owned enterprises in banking, securities, telecom and government agencies such as customs, various tax bureaux, and China Inspection and Quarantine.

"Financial services, IT services and telecom are three segments where TCS has been traditionally strong. With these local partnerships we hope to play our strengths to get into the Chinese market," says Takle.

Apart from servicing local customers and multinationals in the Chinese market, TCS is also counting on China becoming an outsourcing hub for companies in Japan and Korea.

"China could become the offshore destination for projects from Korea and Japan. There is a greater cultural fit between these countries. As the need to cut costs increases, companies in Japan or Korea will want to outsource their work and that will most likely come to China. A strong presence in China will greatly help us then," explains Takle.

Though China's software skills are not on par with India, Takle says it will not be long before the Chinese catch up. And when they do, TCS would rather be hiring them than fighting them.