Deprecated: Function set_magic_quotes_runtime() is deprecated in /home/outindia/public_html/textpattern/lib/txplib_db.php on line 14
Outsourcing to India | Offshore Software Outsourcing India: Offshore Outsourcing Ties Between China India

Offshore Outsourcing Ties Between China India

Anyone can tell you that China takes the second place only to India when it concerns the offshore outsourcing preferences. Costs of operation in China can be lower but some aspects of conducting business in that region are attended with much higher risks.

According to multiple global researches, China falls behind India particularly when it concerns IT services. Revenues from IT services are steadily growing in China, however they hardly reach the half of India’s $12.7 billion per year. The research also indicates that in spite of lower costs, the present value profit in Chinese software companies averages only 7 per cent, contrasted to 11 per cent at other companies with similar activity elsewhere on the globe.

The interview of executives from Chinese software companies and analysis of corporate data revealed that talents management is another weak point. Most managers do very little to develop their staff and very few of them apply share incentive schemes, advanced trainings or other incentives to stimulate and build talent.

The research also discovered a very interesting fact: whereas China has over 8,000 software development providers, three-fourths of these companies have fewer 50 employees – while only five organizations employ more than 2,000 professionals. Probably this can be a trick to avoid unionization, thus keeping China’s attractive image for foreign investors.

The violent competition is characteristic trait of relations between China and India. Rumors say that Chinese government made up its mind to India’s supremacy, and treats it as a tutor in the IT sphere. Nevertheless, Chinese software companies have also acknowledged the potential of India not only as exemplar, but also as an outsourcing destination.

By China’s initiative was established the Sino-India Cooperative Office. It is a government division staffed with 12 software experts, and it is intended for establishing cooperation ties with India-based software giants and talk them into extending their operations to China. China can also boast of its Center of Excellence, an organization targeted to provide learning materials and share professional experience with China’s software engineers. This Center will also enable some 1,000 Chinese software developers to visit India for special purpose training. The final destination is to make the city of Shenzhen, with its grand Shenzhen Software Park, the outsourcing capital of China.