From the
straits times.
AUG 28, 2003
China expected to 'outpace India' as IT services hub
CHINA will overtake India as a base for outsourced information
technology (IT) services, according to Business Week.
'Gartner predicts by 2007, China will pull in US$27 billion for IT
services including call centres and back-office work, matching
India', the magazine said in its Aug 4 issue.
The amount is equivalent to S$47.6 billion.
Economic forces within China and overseas are causing outsourced
work to flow into the country, said the magazine. China's low-cost
talent is one advantage, it noted.
Although India is a powerhouse in high-end IT services, latecomers
these days must pay higher wages for experienced engineers.
The magazine cited the example of BearingPoint, formerly KPMG
Consulting, which opened a software development centre in
Shanghai.
The company's Greater China president Bryan Huang was quoted as
saying: 'BearingPoint pays US$500 a month for engineers in
Shanghai. In India, the pay would be US$700 and in the US it would
be US$4,000.'
While China now provides outsourced IT services to mainly South
Korea and Japan, thanks to cultural, geographic and language ties
with these countries, fluency in English is increasing, due to the
growing number of multinational corporations (MNCs).
According to Business Week, several US manufacturers such as
Sweetheart Cup and E5 Systems are convinced that China is the only
place. Sweetheart says it saves 40 per cent by sourcing in China
rather than India and in a business where pennies count, cost is a
greater consideration.
Beijing also plans to forge partnerships with these MNCs to train
IT engineers to meet the increasing demand for skilled service
Chinese workers, fuelled by China's booming economy and the influx
of multinational manufacturing companies, says the magazine.
Shanghai-based consultancy Con- nectITChina has estimated that
China's software outsourcing revenue would more than double to US$5
billion by 2005, while Gartner forecasts that China needs four
million more IT professionals to meet future demand, the magazine
added.
Indian companies are also tapping the Chinese market. Fourteen big
Indian IT services companies have set up shop in China, and Indian
firms would eventually control 40 per cent of China's IT services
exports, Gartner says.
Copyright @ 2003 Singapore Press Holdings. All rights reserved.