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Dalian, China:: When I was growing up, my parents used to say to me: “Finish your dinner — people in China are starving.” I, by contrast, find myself wanting to say to my daughters: “Finish your homework — people in China and India are starving for your job.”

That thought struck me in a visit to Dalian, a port city in northeastern China. It is not just impressive for a Chinese city. With its wide boulevards, beautiful green spaces and nexus of universities, technical colleges and a massive software park, Dalian would stand out in Silicon Valley.

Dalian symbolises how much China’s most modern cities — and there are still plenty of miserable, backward ones — are rapidly grabbing business as knowledge centres, not just manufacturing hubs. No, Toto, they are not just making tennis shoes here. Try GE, Microsoft, Dell, SAP, HP, Sony and Accenture, which are setting up back-room operations here for Asian companies and software R&D centres.

“I’ve taken a lot of American people to Dalian, and they are amazed at how fast the China economy is growing in this high-tech area,” said Win Liu, director of US/EU projects for DHC, one of Dalian’s biggest home grown companies, which grew from 30 to 1,200 employees in six years. “Americans don’t realise the challenge to the extent that they should. I do have confidence in the American people, though, to take the challenge.”

Because of Japan’s long colonisation of this area in the first half of the 20th century, Dalian has a pool of people who know Japanese. And because of its proximity to Japan and its abundance of Internet bandwidth, and parks and golf courses that attract knowledge workers, Dalian has become the Bangalore of China — the centre for outsourcing by Japanese businesses that want to tap China’s low-cost brainpower. Japanese companies can hire three Chinese software engineers for the price of one in Japan, and still have change to buy a room full of call-centre operators (starting salary: $90 a month).

Although Japan is still deeply resented for its wartime abuses of China, young Chinese have not let that stop them from working as data-entry technicians, software programmers or call-centre operators for Japanese companies — some 2,800 have set up in Dalian — in order to get onto the first rung of the high-tech ladder.