the political leaders of India and China talk about the need to forge
closer links, their technology industries are doing just that.

Newgen Software Technologies, a leading Indian software company, has just signed a deal with Sinosoft Technology, a Chinese software developer listed on London's Aim market.

Sinosoft specialises in export tax software, which it is currently rolling out to China's tax departments — see this EngagingChina story. Newgen's speciality is business process management software, so there are obvious synergies between the two companies.

According to the Hindu Business Line, the Indian company is likely to offer licensing rights of its BPM software as well as customise it for Sinosoft.

Newgen has also signed an agreement with Digital China,
a HK-listed IT services company which was spun off from Lenovo. The
Indian company, which claims to have invested $250,000 last year in
building its Chinese presence, has localised its software for the
Chinese market and is now looking for customers in the Shanghai area in
verticals such as banking, insurance and government.

Hi-tech trade links between India and China are still relatively
rare, not least because the two countries have shared many years of
mutual mistrust.

Hence this week's visit to India by Chinese president Hu Jintao, who called for a free-trade agreement between China and India to boost bilateral trade.

Hu, who was accompanied to the summit by a 120-strong business
delegation, said he wanted to chart a new course in bilateral
relations, which the New York Times dubbed “Hindi Chini Bhai Bhai” — Indians and Chinese are brothers.

The two nations, which contain a third of the world's population,
have agreed to double trade to $40bn billion by 2010 and speed up
efforts to resolve the border row that saw them go to war in 1962.

Despite the fine words, there remain big obstacles to trade,
particularly for Chinese companies seeking to invest in India. The BBC
has a profile
of the Indian operations of Huawei, the Chinese telecoms equipment
manufacturer, which is expanding rapidly overseas. Its R&D facility
in Bangalore employs more than 1,000 people, 95% of which are Indian.

The company has also brought key staff from China and to make their
lives easier it provides a Chinese chef, television channels from China
and even table tennis facilities.

But Huawei says that expansion has not been easy. Obtaining visas
for its Chinese engineers to work on long-term projects in India being
a particular challenge. Trying to get a manufacturing licence in India
is also proving tough. Huawei has applied twice in the last two years
but has yet to win approval.

Many western commentators write about China and India as if the two
countries were engaged in a zero-sum game — the success of one
inevitably comes at the expense of the other. To do so misses the
point, I feel. Each country has its particular strengths and
weaknesses, which western firms are going to weigh up pretty carefully
before opting for one over another.

Nevertheless, there is no reason why the choice has to be so stark.
Indeed, splitting new investment or a batch of orders between both
countries makes a lot of sense from the risk management perspective.

Indeed, Indian outsourcing companies like Satyam are doing just that, investing in outsourcing facilities in China to reduce the strain on their resources back home.

Chinalawblog explores this idea of Chinese and Indian collaboration— sometimes dubbed “Chindia” — in more detail.

More on President Hu's Indian trip in this New York Times article and this Financial Times story.

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