Why China?

As global outsourcing approaches its third decade, the US$1.6 trillion industry has evolved far beyond early clichés of call centers and Y2K bugs. Publicly traded industry giants now boast blue-chip status and wield heavy influence in stock market sectors. Meanwhile, new players have entered the picture as India, the industry's long-standing leader, faces competition from other emerging economies.

China has become an attractive complimentary destination to India, bolstered by a highly supportive central government intent on capturing a bigger piece of the outsourcing pie. China's massive infrastructure advancements, cost competitiveness and blistering economic growth have proved alluring. Both the number of offshoring contracts and their correlating value have increased over 40% for the past two years.

China Outsourcing Snapshot

• In 2010, there were over 10,000 outsourcing enterprises giving rise to
  2.3 million jobs.
• China's service outsourcing contracts in 2010 totaled US$27.4 billion, a 37% increase over the prior year.
• Offshore service contracts comprised 72% of contract revenue in 2010, up 34% from 2009.

Infrastructure

• China is investing in outsourcing. The city of Chengdu, for example, boasts a high-tech zone with planned areas spanning upwards of 1 million square meters and several of China's more than 200 outsourcing training bases.
• In 2010, China added over 3,000 miles of railway and nearly 75,000 miles of highway. High-speed trains traveling 190 miles-per-hour were unveiled in 2011, cutting the 820-mile travel time between Beijing and Shanghai to less than 5 hours.
• China currently builds over 205 miles of road, every day, compared to India's goal of 12 miles of road per day by 2017.

 Talent Pool

• In China, over six million graduates hit the job market in 2010, an estimated 700,000 of which held engineering degrees. 
• In a widely cited 2011 study conducted by Education First, China surpassed India in English proficiency, ranking 29 to India's 30 out of 44 countries surveyed. 
• India graduates approximately 350,000 engineers annually, yet studies place actual employability levels as low as 4.2%. 

 Intellectual Property & Data Protection

• As a condition of joining the WTO, China adopted laws complying with the organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
• In 2004, China's higher court system adopted stricter standards for IP offenses, lowering the threshold for punishable offenses by half and increasing prison terms 120%.
• The number of civil cases heard in the Supreme People's Court grew 40% year-on-year to over 40,000, with the average case lasting only 172 days. India's average case lasts over 5 years.
• China was rated 15 of 183 on the 2010 Country Rankings by the World Bank for contract enforcement, by comparison, Mexico ranked 81, Italy 157 and India 182.
• China is now the world's 3rd largest producer of patents, a key indicator of adherence to IP standards.