Construction has begun on a new IT services and software hub in the city of Dalian in Northeast China.

It is claimed that the Dalian Tiandi Software Hub will be the largest technology industry hub in the world when it is completed in 7 to 10 years, housing more than 200,000 developers.

"Stretching over 40 kilometres, we'll build Lushun South Road into not only China's Silicon Valley, but the world's leading IT city with a first-class environment," said Xia Deren, mayor of Dalian at the launch ceremony. Around 15 billion yuan ($2 billion) is being invested in the project.

Dalian is already the capital of the country’s IT industry, having exported $450 million-worth of software and IT services in 2006 and attracted chip maker Intel to build its first Chinese manufacturing plant in the city. But the plan is to increase its exports to $3.5 billion by 2012.

The software park’s financial backers hope to first attract IT companies from Japan and the Far East, followed by Indian companies and then Western giants such as IBM and Oracle.

Earlier this month, it was announced Yida Group, a Dalian-based property development firm that is backing the development, is about to be acquired by US property developer Equity Office.

According to an Equity Office spokesman, although there are tight restrictions to govern foreign investment in China, it should have no problem in acquiring the Yida Group, as the state government is particularly keen to see the software and IT services industry take off, and all new investment is welcome.

Further reading

Information Age Today - State hampers Chinese innovation

Book review - IT and the East: How China and India are altering the future of technology

Out of India - Who’s best-placed to exploit the world’s biggest pool of low-cost, highly-skilled IT service labour?