Warriors of the future

Now the capital of Shaanxi province has reinvented itself to become one of China's most modern cities. It is the birthplace of Chinese space programs and also an aircraft construction hub. Some call it the "Silicon Valley" of the west, bursting with new cultural and scientific ideas.

Xi'an is also en route to the new Eurasian Land/Continental Bridge that extends from Lianyungang in Jiangsu province to Rotterdam in the Netherlands, a distance of 11,870 km.

In the virtual world, it is one of the eight nodes of the Chinese Internet network, the other seven being Chengdu, Nanjing, Wuhan, Shenyang, Guangzhou, Shanghai and Beijing.

"If you look at the map of China, Xi'an is at the center," says Wang Yong, general manager of Xi'an Xifen XMC Inspection Technology Co Ltd.

"This geographic advantage has given Xi'an the advantage to reach to other parts of China conveniently. It will also play a more and more important role in the future, especially when labor costs and living standards are getting more and more expensive in coastal areas."

"Beijing and Shanghai are very expensive cities. The living cost in Xi'an is much cheaper and it has leading universities that are as good as those in Shanghai," says Mika Niemi, Xifen's Finnish investor. "It is wiser to go inland."

In 2009, the International Association of Outsourcing Professionals (IAOP) dubbed Xi'an as one of the most ideal locations for outsourced business.

Turnover of the software outsourcing service industry at the park reached 43 billion yuan in 2010, 16.2 times more than that in 2001. It is estimated that the annual output per capita in the region was around 400,000 yuan last year.

Every year, some 300,000 students graduate from 100 universities and colleges in Xi'an, 41,000 majoring in IT-related fields. Xi'an Jiaotong University, Northwestern Polytechnical University and Xidian University are among the top universities in China.

"A degree cannot guarantee you a job, but an IT certificate can," says Chen Hongtao, deputy director of the administrative committee at the Xi'an High-tech Industries Development Zone.

Chen says about five years ago, SAP came to Xi'an to recruit engineers, but there were only a few with required certificates. This prompted Chen to set up a software institute to fill the gap by training new graduates to meet the demands of enterprises.

The Xi'an Software Outsourcing Service Institute trains some 15,000 students per year and they are well received. Beyondsoft has recruited 14 from the institute to build its mobile Internet team. Another three found employment with iPlanit, an application software for Apple's iPad.

According to Wang Zigeng, director of Xi'an Software Park Development Center, labor costs in Xi'an are only 60 percent to 70 percent of that in Beijing or Shanghai. And the talent is less likely to go for job hops.