Lured by China's lucrative market potential and Shanghai's talented and cheap labor force, one of India's largest software companies launched its Chinese operation in the city yesterday - and many others are keen to follow.

　　Hyderabad-based Satyam Computer Services Ltd. opened a three-suite representative office in Shanghai Pudong Software Park yesterday, with plans to update to a branch company and research and development center once it receives government approval.

　　According to India's National Association of Software and Service Companies, Satyam is India's fifth-largest software company, with revenues of US.40 million from April 2000 to March 2001. It is also India's fourth-largest exporter, gen-erating US.54 million from exports during the same period.

　　"We've been doing business on China's mainland for more than a year, servicing many mul-tinational clients' branches here. We realize China is not only a huge market, but also a placeswhereswe can find talented engineers to develop software for domestic and regional markets," said B. Ramalinga Raju, chairman of Satyam.

　　"We also have research and development centers in the United States, Japan and Singapore, but we just keep small engineer teams there and send most of the work back to India," said Virender Aggarwal, the company's vice president. "But in China, we will build a large engineer team to solve all pro-blems on-site, as local engineers are able and low in cost."

　　Satyam got in touch with Pudong Software Park last November, and quickly made the decision to move in. Premier Zhu Rongji's visit to India earlier this month accelerated their plans, as he spent 15 minutes talking with India's Infosys - a large competitor - encouraging them to enter China.

　　"After his visit, we felt an urgency to move here, because most of India's software companies are talking about coming to China," said Aggarwal.

　　Even as Satyam's executives were signing an agreement with the software park yesterday morning, one of the firm's rivals was talking with park executives in the same building.

　　"This is the company's fourth visit here, I met another Indian software company this afternoon, while Infosys has sent five delegations to our park, all led by senior vice presidents," said Wu Gang, an executive with the park's department in charge of introducing overseas investment, adding that Infosys will definitely set up an office in the park.

　　Entrysintosthe Chinese market is crucial for Indian software companies, as 71 percent of India's software exports are sold to six advanced countries. Diversification of the industry's income sources, especially from the fast-growing Chinese market, will help Indian companies survive the recession.

　　"We welcome the Indian companies' arrival," said a city government official. "We should learn from them and improve our management and training systems. Only the weak com-panies will not survive."

　　Though China and India started their software industry at about the same time in the 1980s, India is currently among the world's top software exporters, with an annual revenue of US.2 billion coming from overseas last year, while China was way be-hind.

　　Last year, Shanghai's software exports reached US million. Local exports are expected to double the volume this year.

　　"The first thing we learned from India was Buddhism, which became popular in China for thousand of years, now the second thing we should learn is software," said Hu Hongliang, general manager of Shanghai Pudong Software Park.