China Pushing Outsourcing Industry to Perform Bett

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The Chinese Government is coming out with a slew of incentives, including tax rebates and credit support, to boost the nation's services outsourcing industry.

A senior Commerce Ministry official was quoted by The China Daily as saying that his ministry would work with related government departments such as the Ministry of Finance and the State Administration of Taxation to launch more favorable policies for the services outsourcing industry.
Shan Qingjiang, Deputy Director of the ministry's Department of Trade in Services, told the China International Software and Information Services Summit, that with China already a major manufacturing powerhouse, is making efforts to boost its services outsourcing sector over recent years in a bid to move up the value chain and boost innovation in the IT sector.
Its [link widoczny dla zalogowanych] revenue grew more than 40 percent in 2006 to 1.4 billion dollars, but that still accounts for just two percent of the global market.
According to Shan, the government will further encourage multinational companies to set up services outsourcing operations in the nation. They are also welcome to set up joint ventures with Chinese counterparts.
The Ministry of Commerce launched a pilot project last year to develop 11 bases, including Beijing, Shanghai and Dalian, for services outsourcing across the country. These are expected to attract 100 multinational corporations to transfer part of their outsourcing businesses to China, and create 1,000 large-scale international services outsourcing companies.
Outsourcing companies from around the world have been expanding aggressively in China in recent years, in a bid to tap into its low-cost talent pool and take a slice of the booming IT services market. HP, one of the world's largest IT firms, currently has some 2,700 engineers in China.
Tata Consultancy Services,[link widoczny dla zalogowanych], one of India's most powerful IT outfits,[link widoczny dla zalogowanych], established a new outsourcing joint venture in Beijing with Microsoft and three Chinese partners in February. It expects to increase its headcount in China ten-fold to 5,000 by 2010, making it one of the largest players in the country.
China's IT services outsourcing industry could generate 56 billion dollars in revenue and create four million jobs by 2015, a White Paper released by Electronic Data Systems (EDS) has claimed.
IT outsourcing service providers in China could earn as much as 18 billion dollars by 2010 and 56 billion dollars by 2015, the report said, adding that the world's second-largest IT service provider had also reached a strategic cooperation agreement to develop the IT outsourcing industry in China on Thursday.
The White Paper,[link widoczny dla zalogowanych], titled "Building a World-Class IT Services Outsourcing Industry in China",[link widoczny dla zalogowanych], said China has distinctive advantages such as an abundant supply of raw talent,[link widoczny dla zalogowanych], world-class infrastructure and low costs.
Unlike their Indian counterparts, outsourcing companies in China work closely with local clients from industries such as banking, securities and manufacturing. These experiences allow them to develop their own domain expertise and enhance their innovative capacity.