Satyam Computer Services Ltd. last week announced plans to expand its Chinese software development operations in order to offset rising IT labor costs in India.

Virender Aggarwal, director and senior vice president for the Asia-Pacific region, the Middle East, India and Africa at Hyderabad-based Satyam, said the IT services firm will open a development center in Guangzhou, China, to build custom software for customers in southern China. A larger office campus will be set up in an as yet undetermined city to serve companies worldwide, Aggarwal said.

Satyam plans to dramatically increase its Chinese workforce over the next three years, according to Aggarwal. "I can't give a figure of the number of staff we will hire in China, but it will be in multiples of thousands," he said.

The company currently has about 270 employees in China at a software development center in Shanghai and smaller facilities in Beijing and Dalian. Offshore outsourcing and IT services firms have little choice but to expand in China because of the increasing labor costs in India, Aggarwal said. However, he noted that Satyam isn't likely to expand its Shanghai facility because personnel costs are rising in that city as well.

-- John Ribeiro, IDG News Service