Can China Top the U.S. in R&D?

China's burgeoning IT work force is luring tech companies to move their R&D facilities.

Technology vendors are not just selling products into the Chinese market these days. They are moving in.

Hewlett-Packard Co. opened a research lab, HP Labs China, in November, joining Microsoft Corp. and IBM and other IT companies that have set up research labs in the country to tap the increasing number of technical graduates Chinese universities are turning out.

The result: cutting-edge technology that will challenge U.S.-based research counterparts for next-generation development leadership.

A visit to Microsofts Chinese research arm, known as MSR (Microsoft Research) Asia, in Beijings Haidian district, provides yet another indication of the software makers commitment to Asia.

MSR Asia employs about 200 researchers and has transferred more than 100 technologies from research to product teams for products such as Office XP, Office System 2003, Windows XP, Windows Server 2003, XP Media Center Edition, Windows XP Tablet PC Edition, Xbox, MSN and Vista. Wei-Ying Ma is a lead researcher at MSR Asia whose 18-person team is working on search and data mining technology. The sponsors of a recent technical conference said the group should really be called "Microsoft Research Army" because of the potent presence of Mas group, which published 12 of the 71 technical papers delivered at the conference.

Not far from MSR Asia, across the Haidian district of Beijing, and in the Zhongguancun zone—known as Chinas Silicon Valley—sits IBMs China Research Laboratory. Both IBMs China Research Lab and the companys Beijing Linux Technology Center reside in the Zhongguancun Software Park, an ultramodern area whose architecture looks like a Jetsons-meet-James-Bond scenario.

/zimages/1/28571.gifClick here for a slideshow featuring the Zhongguancun Software Park.

Directly across from the park, Chinas Lenovo Group Ltd. has a massive R&D facility, while inside the software park, IBM has neighbors such as Oracle Corp., Iona Technologies, Siemens AG, Harbour Networks and Censoft.

/zimages/1/28571.gifThough Linux is rising in popularity in China, the majority of enterprises still prefer commercial software over open-source middleware. Click here to read more.

The common theme among the research companies eWEEK visited here was a focus on the enterprise.

Yue Pan, manager of semantic technologies research at IBMs China Research Lab, said his group is working on relationship analytics and an integrated ontology development tool kit. The tool kit is based on the Eclipse Modeling Framework, Pan said. Meanwhile, Chen Ying, senior manager of dependable and performance computing research at IBMs China Research Lab, said his group is working to improve the robustness of WebSphere and to deliver a model-driven approach to automating the management of all software running in a data center.

Excellence in search technology is Microsofts main pursuit. "[Search] is so important from a business point of view," said Harry Shum, managing director of MSR Asia. "Whoever controls search today drives a lot of Web traffic. So its really very dynamic. Three years ago, no one, even Google, had figured out this business model. And now, all of a sudden, everybody is rushing into this space. And Microsoft realizes we cannot lose the battle. We have to fight back, at least to get one-third of the pie."

The battle over search prompted the recent legal wrangling between Microsoft and Google over Googles hire of Kai-Fu Lee, a former Microsoft employee and the person Microsoft tasked with founding MSR Asia seven years ago. Microsoft and Google settled the case last month.

Next Page: MSR Asias strengths.