Beijing: China is hopeful of bridging the vast gap in software exports to pip India to become the world's biggest provider of the services.

Analysts attending the 'China International Software Outsourcing Summit 2006' held in Shenzhen claimed that in a few years time about five to 10 per cent of US and European software outsourcing will be diverted from India to China.

Increased outsourcing contracts will boost mergers and acquisitions within China's software industry, so that enterprises can scale up and win more contracts despite the hurdle posed by the English language, they said.

A recent survey shows that in the mid-1990s, only 15 per cent of China's software companies were under contract to foreign companies to provide outsourced software, but in 2005 the figure had climbed to 40 per cent.

Outsourcing contracts with US-based companies doubled in 2005 over the previous year, while business with EU firms was up 85.7 per cent, Xinhua news agency reported from Shenzhen.

The global service outsourcing market is worth between 300 billion and 500 billion dollars. Business insiders have predicted the market will reach one trillion dollars in 2008 with an annual growth of 7.9 per cent.

Despite the Chinese optimism, it still appears to be a difficult task as India, the world's biggest software outsourcing contractor, exported software worth USD 23.6 billion in the 2005- 2006 fiscal year, accounting for 80 per cent of the country's total software industry revenues.

China only exported US$ 3.59 billion worth of software that year, representing eight per cent of the country's total software revenues of US$ 50 billion.