Current status

Currently, there are more than 380 companies in Dalian Software Park (a September, 2006 survey by Dalian Software Park):

58% Domestic Chinese companies 42% Overseas companies 27% Japanese companies 15% Other Overseas companies (American, European, Korean, Taiwan. Korean, etc.) Workforce

The IT service work done in Dalian Software Park can be categorized as follows (A 2006 survey by Dalian Software Park):

40% Application software development 30% Business process outsourcing 10% Embedded software development 20% Other, such as Drawing, IC or Printed Circuit Board (PCB) Design, R&D and Animation/Video Games

Application development is done mostly by the engineering school graduates of the universities, while embedded software development requires more technical skills in the areas, such as telecommunications or special hardware.

Those workers involved in BPO varies from the middle school graduates for data entry, to the foreign language school graduates for simpler BPO work, and the returnees of overseas studies for inbound or outbound call center/contact center work. To emphasize the importance of information privacy, Dalian City Software Industry Association has recently implemented, in cooperation with Japan Information Processing Development Corporation (JIPDEC), a city-wide PIPA (Privacy Information Protection Assessment) program.

Dalian Geography

Dalian City is located in the southern tip of China's northeast region. It is surrounded on the three sides by the Yellow and Bohai Seas, and is known for a relatively mild climate in this region with otherwise severe winter.

Dalian has a metropolitan population of about 6 million. It is the most developed city in the northeast region.

IT Capability and Linguistic Ability

Most of the IT workers come from the engineering schools of the universities in Dalian and other cities in Northeast China. In Dalian, there are Dalian University of Technology, Dalian Jiaotong University, Dalian Maritime University, and Neusoft Institute of Information which is within the Park. In other cities, there are Northeast University in Shenyang, Jilin University in Changchun, and Harbin Industrial University in Harbin.

Workers with English ability come from the various universities where English is predominantly their first foreign language, but they lack the experience of the Indian university graduates with working knowledge of English. There are also the English-speaking returnees of study abroad, typically from U.S., Canada, Australia, New Zealand and Great Britain. French speaking workers are from Dalian University of Foreign Languages (DLUFL, 100 graduates each year), Liaoning Normal University (LNNU, 30 graduates each year) or the returnees of study abroad, typically in France and Quebec, Canada. L'Alliance française, France's worldwide network of French language education, is located at DLUFL.

Dalian is particularly unique in the fact that there are many workers with Japanese language ability for the following historical reasons:

The southern half of the present-day Dalian City was a Japanese occupied territory, 1905–1945 Dalian University of Foreign Language was established in 1963 as the center of Japanese studies in China. Since the late 1980s, many Japanese companies have established manufacturing subsidiaries and have been employing Japanese speaking Chinese.

Another factor contributing to the Japanese language capability in Dalian is the presence of about two million ethnic Koreans, most of whom live in the Northeast. Culturally and linguistically, China's ethnic Koreans are nearly identical to the people in South Korea. Subsequently, they are capable of learning and speaking Japanese with ease.

Preferential Policies

The Dalian municipal government offers generous tax exemptions and subsidies such as corporate income tax exemption during the first two years of business establishment and 50 percent tax reduction in the following three years. After this five year period, the Dalian municipal government will offer a reduced tax rate of 15% rather than the usual 25% for high-tech companies.

The preferential policy of Dalian City can be summarized in the following points:

The university graduates who have sought high-tech jobs are given the Dalian City residency rights Since 2004, the software development companies in Dalian Software Park or Dalian High-Tech Park are allowed to pay reduced amount of contribution to the retirement funds (allowance) The employees of such companies in such locations are given income tax reduction