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Innovation, skills to drive outsourcing industry

(China Daily)

10:15, May 02, 2012

China's outsourcing industry is likely to double in volume by 2016 on account of a fast growing domestic market, with innovation rather than low costs being the leading driving force, industry insiders said.

Although for many, an Indian call center is still the first image that comes to mind when mentioning outsourcing, "China has the opportunity to develop an outsourcing industry much more robust than India ever will", Mike Corbett, chairman of the International Association of Outsourcing Professionals, said in Beijing last week.

India is still the top global outsourcing service provider, but China is catching up rapidly because it combines the development of offshore business with the support of a rapidly growing domestic market, Corbett said.

Corbett predicted that China's outsourcing market will be among the world's top three in the next five years along with the United States and Europe, and customers from the technology, automobile, logistics and healthcare sectors will be the key drivers of development.

As a result, "I would be surprised if the industry (in China) does not at least double in the next four years", Corbett said.

"More multinational companies select China not only because of its low costs, but also to cash in on the fast-growing Chinese consumer market," said Angela Wang, chair of IAOP's Beijing chapter and senior vice-president of Neusoft Corp, the largest IT solution and service provider in China.

With a profound understanding of the local market, Chinese providers have more resources and advantages, Wang said.

"That is why multinational companies would like to establish partnerships with Chinese providers," she said.

"Such partnerships are not only about outsourcing, but winning the China market."

According to statistics from the Ministry of Commerce, the revenue of China's outsourcing industry in 2011 totaled $32.4 billion, of which $23.8 billion came from offshore business. The industry grew more than 60 percent year-on-year.

Outsourcing contracts carried out by Chinese companies currently account for 23 percent of the global total, coming second after India.

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