Offshore Software Development Outsourcing China
Present State, Trends and Predictions for China’s Software Outsourcing Industry
China, being the world’s largest manufacturing country, is strongly familiar with the concept of outsourcing. It has dominated the global outsourcing manufacturing market for several decades now. In recent years, however, China has ventured into outsourcing in an entirely different industry – information technology. Today, the industry of offshore software development outsourcing in China is flourishing due in part to the availability of structures that support such outsourcing ventures.
Many global companies and IT leaders from various industries now regard China as they new destination for offshore IT outsourcing. Large IT companies, some in the top Fortune 500 list, have already established their offshore software development outsourcing in China.
Growth Factors and Trends
The following are some of the critical factors and recent trends that are contributing to the growing interest to offshore software development outsourcing in China:
Low Cost Services
Utilizing IT professionals in China can save a business anywhere from 30 up to 80 percent over hiring an in-house IT staff. The cost of offshore software development outsourcing in China is presently lower than in India by 20 to 30 percent.
Advanced IT Skills
Offshore software development outsourcing in China benefits from the high regard of the Chinese people for education. Over 2 million students graduate from colleges and universities in China every year and over 700,000 of these graduates have computer engineering degrees. Offshore software development outsourcing in China currently employs 200,000 IT specialists with 50,000 professionals joining the software outsourcing sector each year.
Local Software Market
The domestic market of offshore software development outsourcing in China is growing further due to the rapid increase in the number of companies and businesses currently present in China. Foreign manufacturing companies alone are around 200,000. Other industries such as banking and telecommunications are also booming. All these industries require software development, hence, the rise in demand for offshore software development outsourcing in China.
Intellectual Property Rights
China’s legislative body has adopted new laws that protect intellectual property rights and the strict implementation of these laws to support the industry of offshore software development outsourcing in China. In addition, software development companies in China are enforcing their own measures to safeguard intellectual property such as physical security and controlled access to information.
China’s WTO membership
China has been a member of the World Trade Organization since December of 2001. 'With this very important development, analysts predict that China will become one of the biggest world economies within five decades. China’s powerhouse economy is one of the strongest factors contributing to the growing demand for offshore software development outsourcing in China.
Government Support
The five-year plan of the Chinese government covers not just offshore software development outsourcing in China but the whole IT outsourcing industry of the country. It will grant funding and other support to IT outsourcing development programs. The government has recognized the importance of the IT industry and will facilitate its rapid development in alignment with its entire “modernization construction plan”. The Ministry of Information has placed the promotion of the offshore software development outsourcing in China as a top-priority objective.
Projections
Many of the latest analyst predictions are highly favorable towards offshore software development outsourcing in China and for the rest of the country’s IT outsourcing industry. Some of the forecasts include increased IT spending in China, which will reach US $30 billion with a growth rate four times that of any other country in the world. This will naturally increase the IT export levels, particularly in software development and application development. Looking at the trends of China’s economy and the IT outsourcing industry, it is not surprising why many analysts to expect tremendous growth and rapid maturity for the offshore software development outsourcing in China within the next few years.
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