Outsourcing from Japan to China has increased dramatically in recent years, resulting in increased mutual benefit. Japan's dependency on outsourcing of software development to China will lead to the most efficient information and communication technology (ICT) development in Japan, which in turn will induce China's ICT development. Software outsourcing leads to a co-evolutionary dynamism between both countries and such a co-evolution can be enabled by a co-evolutionary dynamism between advancement of economy, ICT and software in both countries. This paper attempts an empirical analysis of Japan's outsourcing of its software development to China by utilizing the concept of substitution dynamism between Japan's own software development and the development by software-leading countries, China, USA and India.