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Last Updated: Wednesday, 25 June, 2003, 11:31 GMT 12:31 UK
India and China talk trade
Francis Markus
BBC Shanghai correspondent

After triumphantly signing a series of political agreements with Chinese leaders in Beijing, the Indian Prime Minister, Atal Behari Vajpayee, is visiting China's commercial centre, Shanghai.

This leg of his trip expected to be dominated by trade.

Atal Behari Vajpayee
China hopes to gain hi-tech expertise

Trade between India and China has grown spectacularly in recent years, although it started from a low base, and remains far behind China's trade with the US, European Union or Japan.

Last year China and India did business worth $5bn.

That figure is expected to double or treble within the next few years.

Technology tie-ups

In the last two years Sino-Indian business in the information technology sector has been growing rapidly.

Businessman He Qiong sees a perfect match between the skills brought by the Chinese and those of the Indians to the joint-venture software training centre he heads.

"They give us managing experience and they give us some systems, managing systems," said Mr He.

The Chinese, meanwhile, contribute their knowledge of their home market.

With dozens of software training schools across the country, Mr He's company hopes China can gain from India's experience and create a pool of trained personnel.

Mr Vajpayee at Longmen grottoes, Henan province
Mr Vajpayee took time to see evidence of old links

Such changes are vital if China is to catch up as a software power in the next few years.

Already China is attracting investment from ever more Indian software firms, though many are taking a gradual approach to getting involved in China.

"In order to have a smooth landing we are not going and approaching all the local customers directly," said Raghvendra Tripathi, who is regional manager of Satyam, a recent arrival in the Chinese market.

Instead, Satyam is focusing on targeting the joint ventures of multi-nationals.

It plans to start targeting local Chinese firms within the next few months, cashing in on India's high reputation for software.

As well as making inroads into China's market, where IT usage in industry remains low, Indian IT firms are also eyeing China as a springboard to Japan's software market, helped by the fact that Chinese characters form the basis of Japanese script.

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