Tata Consulting Services (TCS), India's largest IT firm, plans to build its operations in China in a big way to emerge as a major player in the market there.

"Going forward, China will have the second largest operations after India in our global delivery model, integrated with regional delivery centres to offer end-to-end solutions for the local market, and multinationals operating there," TCS chief executive office and managing director S. Ramadorai told reporters here Friday.

As the first Indian software major to foray into China with its wholly owned subsidiary, TCS plans to leverage its presence by commencing in September the operations of its newly formed joint venture (JV) with three state-owned Chinese entities and Microsoft as its technology partner.

"We are bidding for large contracts in the banking sector and looking forward to bag major government orders. The Chinese IT market, including software services, is estimated to be about $30 billion a year.

"We intend to ramp up the headcount in the JV to about 5,000 techies by 2010 from 500 this year for widening our portfolio of services, including BPO services for enterprises across verticals," Ramadorai said.

The JV (TCS China), floated early this week through subsidiary TCS Asia Pacific Pte with a capital of $12 million, will be the first industrial scale software firm in China. When Microsoft gets on board, the equity will be expanded to $15 million, with TCS offloading 10 percent of its present holding (77 percent) to the former and two percent to the three Chinese partners, which together hold 23 percent currently.

The three Chinese entities are Beijing Zhongguancun Software Park Development Company, Uniware Company and Tianjin Huayuan Software Area Construction.

"Eventually, we propose to merge our existing Chinese subsidiary into the JV after we exercise the option to increase our holding in the latter by buying out the stake of the Chinese partners," Ramadorai said.

"We will also be enhancing the subsidiary's operations to increase our engagements in the Chinese market to offer our services and solutions to the financial sector, insurance, manufacturing and retail," he pointed out.

Giving an update on the TCS strategy to consolidate and expand its operations worldwide, Ramadorai said the company would be spending about Rs.10 billion in infrastructure and allied facilities and Rs.3 billion in technologies.

"To sustain our robust growth and expand our geographic presence, especially in Europe and Latin America, we will continue to look for strategic mergers and acquisitions in these regions, where we have made a strong foray with a slew of buyouts in the last fiscal (FY 2006)," Ramadorai added.