Chinese IT industry poses little threat to Indian software initiatives, according to a study.

Chinese IT sector caters more to domestic demand, while Indian software industry is mostly export-driven, says the study by Ted Tschang and Lan Xue, two Chinese software experts.

"The Chinese industry's orientation is different from India's as it has a large number of companies focused purely on making products for the domestic market," says the study.

In fact, Chinese are tied up too much with domestic demands, let alone getting into export services. India, on the other hand, is geared towards becoming the back office of the rest of the world, according to the study. 

China is trying to increase the share of domestic companies to 60 per cent of the country's IT market over the next decade.

Many of the larger firms are already state-owned, unlike in India where private companies rule the industry.

Like India, China, too, suffers from the migration of IT professionals to the US. This is despite their language skills being inferior, on an average, to the Indians.

In 2001, China needed 350,000 IT professionals against a supply of just 50,000.

This led the Chinese government to designate 35 universities as national software engineering programmes.

The perception that Chinese IT men are cheaper and hard-working not fully correct, according to the study.

Chinese IT professionals lag behind in skills as well. Only about 10 per cent of the workforce has experience with complex programming tasks.

Despite the efforts of the Chinese government to assign its software industry a greater role in the domestic economy, multinationals still hold 66 per cent of the country's products market.