Competition heats between China, India for service outsourcing

14:16, October 15, 2010      

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With low costs, advanced IT technology as well as complete infrastructure, China has become the most competitive country in global service outsourcing.

The announcement came on Oct. 14 as Beijing released its 2010 report on China's IT service development.

The report, which was compiled by the Ministry of Industry and Information Technology, said the IT service in China witnessed 30 percent annual growth over the past three years, three times more than national GDP growth over the same period. It is estimated that the growth rate is expected to hit 25 percent in three years, and the industrial scale will reach 820 billion yuan by 2012.

According to the report, the information service industry is shifting to developing countries, with Russia becoming the development and research centre of global emerging service outsourcing, the Philippines aspiring to the status of the largest call center outsourcing destination in the Asia-Pacific region and Vietnam hoping to be the world's largest IT provider.

The report said China enjoys the advantages of being a software outsourcing giant thanks to low labor costs, a large number of employees in software development, language advantages in terms of Japanese and English as well as government support. Furthermore, European and American markets have become less and less dependent on Indian outsourcing providers.

The report also pointed out that China still takes up a small portion of the global total. Despite rapid development, the outsourcing industry in 2009 only accounted for 4 percent of the global total, which is in sharp contrast to China's status as a global leading industrial country.

India, which is similar to China in many aspects, yields more than 34 percent of global offshore outsourcing services, 10 times more than China does.

By Zhang Xinyi, People's Daily Online


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