John Buyers of Stephenson Harwood explores some of the key issues surrounding China’s determination to be an offshore services giant.
The popular image of China is that of a low-cost, high volume manufacturing industry. According to a recent report commissioned by Microsoft, China’s $14 billion IT industry will overtake the UK’s in the next five years. So what are the factors that are coming into play which will make China an increasingly attractive destination for offshore services — and which will, in the near future, transform the economic paradigm of the Middle Kingdom and reinvent it again?
China versus India
India may be the undisputed current leader as far as offshore outsourcing is concerned, but China has turned its attention to the lucrative offshore services market and is keen to close the gap between the two economies. The labour costs of China’s IT industry compare favourably with India’s — which are increasing by 15 percent per annum. Although India has made great
