Offshore IT Outsourcing Vendors China

Offshore IT Outsourcing Booms in China

China's tremendous economic growth has led many business people and analysts to believe that the country’s offshore IT outsourcing industry could soon rival with India, currently the dominant player in the market.

A recent industry report that focused on Chinese offshore IT outsourcing vendors and the sector as a whole showed that while China is fairly new to the industry, it is increasingly closing the gap with its rivals. Indeed, each offshore IT outsourcing vendor in China is accelerating their development and expansion plans towards that end. Among the goals of Chinese offshore IT outsourcing vendors is the consolidation of their industry, which is critical for it to grow and capture a larger size of the market.

At present, many of the world’s leading IT companies and services firm have already started their operations in the country citing local market strength, availability of talent and infrastructure, government support, and greater access to the Japanese and other Asian markets.

A Look at Statistics

There are plenty of reasons why industry players and analysts are optimistic about the future of offshore IT outsourcing vendors in China. For one, the Chinese IT and software sector’s annual revenue has grown an average of 42 percent each year since 1997. It has reached close to US $7 billion dollars in 2003. Analysts predict that the entire IT outsourcing service market in China will grow over 20 percent annually in the next three to four years. In 2005, the industry has generated over US $10 billion, up 20 percent from the previous year. Offshore IT outsourcing vendors in China experienced an average of 20 percent growth in their network services, maintenance services and special IT support services.

In addition, the offshore IT outsourcing vendors in China continue to enjoy a steady availability of IT manpower with the increasing number of graduates and professionals in the engineering and software applications fields. English proficiency has also increased with the number of English-speaking workers reaching more than 20 million. Industry experts see signs of further growth in China with the increase of IT spending in the country along with its participation in the World Trade Organization and becoming the host of the 2008 Olympics.

Addressing Challenges Together

Offshore IT outsourcing vendors in China realize the challenges they have to meet in order to remain competitive in the global arena. While the growth of offshore IT outsourcing vendors in China is primarily a result of the strong domestic market, the Chinese are set to maximize the changes they have already created in the industry to drive global demand for their services.

As each offshore IT outsourcing vendor in China cooperates to consolidate the industry, China gains a better position to succeed in the international outsourcing market. Supporting their ambitions is the Chinese government, which has made the IT services outsourcing industry one of its top priorities to further boost economic growth. The government has built software parks designed to become hubs of the IT outsourcing services industry where a domestic and a foreign-owned offshore IT outsourcing vendor in China can set up base. Moreover, an offshore IT outsourcing vendor in China can rely on government support in other areas of business such as assistance in recruitment and human resources training. Indeed, the Chinese government is pushing to develop its IT outsourcing capabilities to become less reliant on foreign technology and become a world-class IT outsourcing provider.

These factors along with the efforts of every offshore IT outsourcing vendor in China to improve their human resources management, develop their employees, protect intellectual property rights and focus on providing sustainable value to clients all contribute to securing a bright future for the country’s IT services outsourcing industry.

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