New York: The advantages of outsourcing from the US to cheap brainpower nations like India have been diminishing because the wage gap between America and Asia is shrinking, a media report has said.

"The wage gap between the US and Asia is shrinking. Pay scales are rising fast in India and China for college-educated, English-speaking professionals," the Business Week said.

The weekly says the reports that General Electric (GE) plans to sell its entire business-processing operation in India for $ 1 billion raises the "interesting question of whether the offshoring phenomenon may be peaking."

"Not that it will stop being a key part of corporations' global strategy. In an integrated business world, you go where the best talent is. But the surge in companies going to India, China and Eastern Europe in search of very cheap brain power may soon be coming to an end - far sooner than anyone has anticipated," the report said.

The business weekly wrote: "Since these Indians and Chinese aren't anyone's fools, they've been demanding - and getting - increasingly higher compensation. After all, these web-savvy men and women just have to check the human-resources websites of eastern companies to see what their counterparts are making. And indeed they have, as their rising compensation proves."

Chinese wages for skilled talent and college-educated workers have been running up sharply in recent years, Business Week said adding middle managers in China were making about $ 9,000 a year which was what a correspondent made in his or her first year in business journalism out of graduate school in the late '70s.

"While reliable statistics on Chinese engineers are hard to come by, it is a safe bet that they are making a multiple of that salary. One reasonable estimate has good software writers probably making around $ 20,000 a year in Shanghai. Ditto for many hot-shot programmers in Bangalore."

The demand for English-speaking service workers in Bangalore is so high that GE as well as Infosys Technologies and Tata Consultancy Services (TCS) are now looking outside major Indian cities to set up new call centres and other operations because they can't recruit enough college-educated people. The same is true in China, it said.

"What does that tell you? Most of the best and brightest Indians and Chinese are already fully employed and are negotiating higher wages and benefits for their work," the Business Week said.

The weekly expected that the hundreds of thousands of new engineers, designers, accountants and other knowledge - industry types that were being graduated every year in India and China might not keep wages low vis-a-vis America and Europe because the chances were good that the 8 to 10 per cent annual gross domestic product growth rate projected for both countries would increase domestic demand.

And as a result, wages would continue to rise. In both India and China, despite the large numbers of well-qualified students graduating every year, salaries were still increasing.