China's software schools progress.

At the moment, China's software workers perform mainly low-level programming tasks, and this lack of higher skills in software means China is lagging far behind countries like India.

However, China already is producing huge numbers of technically trained graduates, for example 58 percent of all degrees awarded in 2002 were in physical sciences and engineering, compared with 17 percent in the United States, according to the U.S. Presidential Council of Advisors on Science and Technology.

In engineering, about 220,000 Chinese bachelor's degrees were awarded in 2002, compared with 60,000 in the United States.

Well-funded labs

Peking University, China's top educational institution for the past century, has long excelled in the liberal arts, training generations of China's best scholars. Computer science and engineering have been the strength of Beijing's other top university, Tsinghua.

In an industrial zone an hour's drive from central Beijing, Peking University's School of Software campus of modern low- rise buildings and pristine lawn contrasts sharply with its surroundings--a jumble of construction sites with half-finished buildings, vast fields and rows of dingy shops.

This is no ordinary university. Inside the software school's gleaming marble halls, students work in state-of-the-art labs funded by IBM, Microsoft, Sun Microsystems, Motorola, Oracle, Intel and other U.S. technology firms eager to attract graduates to work in the companies' rapidly expanding businesses in China. The software school works closely with Chinese and foreign corporations, basing its curriculum on industry needs. The school which has 860 graduate students and 75 students pursuing second bachelor's degrees plans to bring its ranks to 3,800 within three years. Students specialize in subjects such as integrated-circuit design, information security, digital arts design and entrepreneurship, with much of the teaching done in English. Chen Zhong, the school's independent-minded dean, hopes to use Peking University's traditional strength in liberal arts to nurture students' creative talents. His school holds seminars and lectures by professors from departments such as art, culture, psychology and literature. In order to help foster innovation, these things are much more emphasized at our school," Chen said.

Practical Emphasis

Unlike traditional universities in China, the new breed of software school aims to provide practical experience, encouraging students to work on real software development projects.

One student is creating a model information system for the Chinese Olympic Committee to use to track results and manage the games when Beijing hosts the 2008 Summer Olympics. She works in the computer lab every morning. Once a week, she takes classes in Web services, data mining and customer-relationship management, all taught by professors from the United States.

'A lot of my classmates have gone to many big companies such as Intel, Microsoft, IBM and Motorola for their internships," she said.

The campus seems light-years away from typical Chinese universities, A fiber-optic network runs through the campus, and each student has a computer in his or her room with broadband Internet access. In Luo Xiao Chuan's room, a picture of a silver BMW with a California license plate hangs on the door. Thick cables taped to the wall snake around bunk beds, mosquito netting and drying laundry, connecting to a blinking Ethernet box.

Nearby, students in the school's new computer lab talked about their aspirations with a reporter, speaking fluent English. China's booming economy and resolve to build a world-class tech industry have made them optimistic about the future. "Beijing's high-tech district of businesses, research institutes and universities, known as Zhongguancun, is already like Silicon Valley," said Jim lia, 24. who is from the eastern Chinese city of Suzhou, who is studying toward a master's degree in embedded software systems while working part time at Motorola in Beijing.

Students said they were inspired by recent Chinese contributions to mobile phone technology. Chinese mobile phone equipment maker Datang developed a new Chinese standard for the latest generation of wireless technology, bypassing the American and European network standards. Technology, however, is only one part of the equation. Developing a strong software industry in China also will require better business management, Management at Chinese companies have a hierarchy and reward system based more on personal connections than merit.

Confidence in the future

To introduce concepts and practices from abroad, the school has recruited U.S. technology executives and academics as its department heads, including professionals from Microsoft, the University of California-Berkeley and Rensselaer Polytechnic Institute.

Unlike most Chinese universities, the software school gets much of its funding from foreign companies who have given more than $2 million in donations, grants and equipment, with IBM accounting for about one-third of the total.

Western companies see their support of the school as good for their expanding business in China. "By training the future players of technology in China," IBM will gain access to skilled technical talent, said Xiaoping Qiu, manager of university relations at IBM China.

The software school has launched a venture-capital business to attract investment, help graduates spin off start-ups and provide long-term funding. It closed its first round of fundraising in the fall with $20 million, including $5 million in foreign investment.

With the benefits of massive foreign investment and training, a booming economy and a national mandate, China is poised to surge ahead--and perhaps to one day rival American leadership in technology.

Nothing reflects that potential more than the software students' confidence and desire to become the country's new tech pioneers.

"I want to found a company myself," said Zhang, a Shanghai native who holds a bachelor's degree in law and economics. 'China is developing and there are many chances in the market. In America it's hard to found a company like Microsoft these days. But in China, it's easy now."

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