Chongqing Municipal Information Bureau has signed a memorandum of understanding with Qingdao Xiangyu Information Technology Co., Ltd on jointly creating a software outsourcing base in southwest China targeted at South Korean companies.

According to the agreement, QXITC will set up a company called Chongqing Xiangyu Software Technology Co., Ltd in Chongqing to cooperate with cities and companies like Daejeon, SK Group, Tong Yang Group, LG Group and Hyundai Group from South Korea on talent training and offshore outsourcing. It will work closely with enterprise associations and alliances from both China and South Korea to attract investment from South Korean software companies, and set up affiliates in South Korea to engage in marketing.

At present, QXITC says there are many IT companies in South Korea, but there are less than 100,000 software engineers in the country — about 200,000 less than needed by the country's software industry. As a result, many IT companies from South Korea are moving their non-core software development and offshore outsourcing service to China to increase their profit making points.

It is expected that the South Korean software outsourcing base be completed in Chongqing by 2012, which will host about 105 companies and 20,000 software developers and be the largest of its kind in southwest China with an annual output value of about CNY3 billion and tax realization of CNY1 billion.