A panorama of the Dalian Development Area. Photos by Cui Meng / China Daily

Dalian's livability is also helping to fuel its technological edge

Two decades ago, many Chinese students majored in computer science for better job prospects in Japan, the United States or Europe. But now, many Americans, Europeans and Japanese are looking for similar deals by heading to Chinese shores - more specifically to Dalian, a beautiful coastal city in Northeast China's Liaoning province.

Dalian is one of the most livable cities in China. It lies between the Yellow Sea and Bohai Sea, at the southern end of the Liaodong Peninsula.

Lush greenery of trees and plants cover nearly half of the city, which is kept safe and comfortable by mounted policewomen patrolling its garden-like streets.

So when local authorities encouraged the development of the city's IT sector, Dalian's pleasant living environment and climate made it the obvious choice for many transnational corporations looking to set up their Asia-Pacific centers.

"We aim to build Dalian into a leading city for software and information services," says Party secretary of the Dalian municipal committee, Xia Deren, who also said in a conference in Beijing in March 2010 that Dalian will "overtake Bangalore in five to seven years".

Many people who have been to Dalian know that such targets are entirely possible.

When the Dalian Software Park (DLSP) was only an idea from a local private developer - Yida Group - many shanty buildings stood in the city's western suburbs.

"The land that was previously covered by old buildings and weeds changed the destiny of the city," says Ye Ming, deputy president of the DLSP.

Because Dalian is so close to Japan, a neighbor with strong digital industries, many small software start-ups were launched in Dalian in the middle of the 1990s and started dealing with software outsourcing orders from Japanese companies.

The Dalian Software Park.Photos by Cui Meng / China Daily

The software park was set up in 1998 and was initially designed as the backyard of Japan's software industry.

As the first industry park launched by a private enterprise in China, the DLSP is considered to be a better platform for the nascent sector.

Before entering the new millennium, Neusoft Group, the first listed software company in China, located its research and development center in the park.

Soon, new office buildings and a campus replaced the traditional shanty area. But the target clients could not yet support the park's development adequately because most Japanese companies were very guarded and relatively small.

"We found it very hard to speed up our development by only cooperating with Japanese companies," Ye says.

But in 2002, multinational corporation GE expanded the content of outsourcing services in Dalian.

GE had its financial center in India. But GE and two other companies also founded a company called Genpact to deal with some back-end work of the financial process. GE was looking for a better place for Genpact and a business process outsourcing (BPO) company needed an office in the park.

"We know that Genpact is not a software company and they are not dealing with the software industry directly, but their work needs strong technological support and we need international clients to evolve in our development," Ye says.