"Graduates are loyal, diligent and devoted," says Wang. "The job hop rate for the IT industry in Xi'an is only 15 percent, compared with 28 percent in Beijing or Shanghai."

"Engineers here work on a flexible work schedule," says Ren Bo, marketing director of Xi'an Huatek Technologies Co Ltd. "They have the autonomy to decide when to have a break."

There are enough instruments for fun at Huatek. Walls are decorated with pictures painted by employees themselves. A ping pong table stands next to the meeting room. Next to the PC room, two workers are playing Chinese chess.

"The industry needs freedom for creativity and imagination," says Joseph Xu, president and CEO of Huatek, whose clients are spread across the US, France and Russia.

Xu says the policy privileges they have enjoyed from the government at different levels also play an important role in the overall development of the IT industry in Xi'an.

According to Song Minsheng, vice-director of the department of commerce in Shaanxi province, an annual fund of 40 million yuan has been set up to reward outsourcing service companies with outstanding performance, apart from other incentives like tax cuts and rent exemption.

Song expects Xi'an to expand its influence to neighboring cities and towns such as Hanzhong, Xianyang and Ankang.

"Eventually the plan is to move onto a higher end of the value chain such as R&D and cloud computing," says Song.