Chinese IT services firm Digital China Holdings Ltd has formed a three-way venture to target application outsourcing and management opportunities in the Japanese market.

Hong Kong-based Digital China will take a 55% stake in the new venture, which it is forming with GE Mauritius Equity Investment, a division of General Electric, and Japanese systems integrator TIS Inc. GE Mauritius Equity Investment will take a 25% stake, with TIS taking a 20% holding, which will then operate through two subsidiaries out of China and Japan. Following the deal, the new venture will issue a share capital of $2m, which will be increased to $3m four months after the closure of the investment agreement.

The new venture will enable both Digital China and TIS to gain access to the Chinese and Japanese markets, and utilize the low-cost development facilities of Digital China. GE meanwhile, will also gain access to low-cost development services, adding to its existing portfolio of offshore partners including Tata Consultancy Services, which also has operations in China.