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Software production outsourcing is a popular and re-current topic on Joel’s forum. This thread has a few interesting posts about realities of doing software in India and China. Here’s the China part:

For a comparison with the competition India may come in for eventually…

In China I would guess the infastructure is quite a bit more advanced beause the growth has been more even, and probably more industrial which requires better infastructure. In Xiamen, small city on the coast, the power never goes out, phones are about $12/month, which includes adsl. We have a second T1 line that is about $40/year, though that is only within China. Rent is about $100/month for a normal office, a good furnished apt is about $200. Salaries are under $100/month for unskilled labor, and $300 would be towards the top end (programmers are towards the top end). The skill level is very high, but there is a larger language barrier here for western companies. There is not a big software thing happening yet, but there are a lot of programmers/engineers, and it is in the ‘five year plan’. Ceratinly they have set their sites on that industry, some success is certain just because of domestic demand, and I don’t see how they could fail to make inroads internationally too.

This is all for Xiamen, a very developed small coastal city. The famous cities are more costly with higher skill levels, the rural areas are of course almost free, but harder to find the right mix of skills…