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IBM will work with small and midsize businesses across China to help them build the technology infrastructures they need to better connect with their trading partners. IBM says the average Chinese small business must deal with 485 trading partners each month. "One of the biggest challenges for Chinese SMBs is improving connectivity," says Dave Carlquist, VP for global emerging marketplaces at IBM.

As part of the plan, IBM will open near Beijing University an SMB Innovation Center staffed by IBM researchers who will work directly with Chinese application developers and business owners. The hope is to create software that Chinese businesses can use to tap more easily into the global supply chain. The lab will be part of an existing IBM research facility.

One Chinese software company that IBM researchers are working with is efuture Information Tech Inc., a developer of retail technology. IBM wants to help efuture make its supply-chain-collaboration software more compatible with major business applications used by multinational companies. Also, IBM hopes adapting software such as efuture's to the collaborative tools built into its middleware products, such as IBM WebSphere, will boost its sales in China.

Last year, SAP introduced its own software--Business One--for the Chinese small- and midsize-business market.