Infosys Technologies Ltd, India's second largest exporter of software and services, intends to expand operations into China, having already applied to the Chinese government to set up a software development center for 200 professionals in Shanghai, and has committed $5m to its proposed Chinese subsidiary.

Two of Infosys' Indian rivals, Tata Consultancy Services and Satyam Computer Services, already intend to use China as a base to service the east Asian market as China is considered to be an upcoming destination for services companies looking to set up outsourcing bases, and is a potential rival to India's fast-growing software industry.

Infosys recently increased its revenue expectations for the 12 months ending March 31, 2004 to between $1.008bn and $1.015bn (up as much as 35% on 2003), and upgraded guidance on annual profit to $1.95 earnings per share. Its performance has helped boost its stock price by over 50% in the last two months.