China outsourcing

Current situations of the industries in China’s domestic market 

We can see from the following two charts that in China outsourcing enjoys the highest degree of acceptance in finance, information technology, manufacturing and telecommunications industries. The outsourcing businesses in these industries are mainly concentrated in technology support and software development of the ITO category and data centers and call centers that belong to BPO business operations. Besides, transportation, retail / trade and public utilities industries also show relatively great willingness to accept outsourcing. These industries will become a new direction for the future development of China’s outsourcing industry.

Chart 1-7 Distribution of outsourcing demand in China’s different industries, 2008
Data source: CSIP2008 white paper on China’s software and information outsourcing industry and analysis conducted by Ernst & Young

Chart 1-8 Acceptance degrees of different industries for outsourcing in China 
Data source: CSIP2008 white paper on China’s software and information outsourcing industry and analysis conducted by Ernst & Young

Finance, information technology, manufacturing, and telecommunications industries that show higher degrees of acceptance for outsourcing have an important feature in common, i.e. their internationalization levels are higher. The internationalization level here is mainly decided by the following several factors: perfection degree of infrastructure, sophistication level of enterprise management philosophy, segmentation degree of business process and the degree of impact  it may receive from the international market. It is precisely because of the impact of internationalization that forces enterprises to learn advanced experience from their rivals, the process of which is in itself a process of enterprises going further towards internationalization. Comparatively speaking, the impact of domestic competition on enterprises is much weaker.