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China rising fast as a services outsourcing hub
Beijing, Aug 03: If you visit Tom Reilly`s office in Guangzhou, you may have trouble hearing above all the construction noise. Workers at the Cap Gemini Ernst & Young facility in the southern Chinese city hammer away even as employees tap at their computer keyboards.
Beijing, Aug 03: If you visit Tom Reilly’s office in Guangzhou, you may have trouble hearing above all the construction noise. Workers at the Cap Gemini Ernst & Young facility in the southern Chinese city hammer away even as employees tap at their computer keyboards.
Since it began in 2001 in a tiny, windowless room, the Cap Gemini center has grown to employ 120 people doing everything from entering sales data for a Hong Kong convenience-store chain to processing cargo information for a Norwegian shipping line. And Reilly expects the staff to reach 500 within 18 months. “It’s the smell of progress,” he says, sniffing the fumes of wet paint permeating the office.
That progress is starting to spread across China. After emerging as the world’s hottest manufacturing hub, China is joining English-speaking countries such as India and the Philippines as a key destination for outsourced service jobs.
Near Guangzhou’s airport, a call center run by Hong Kong’s PacificNet Inc. employs 2,000 Chinese manning the phones for telecom and insurance companies in Hong Kong, Taiwan, and China. PacificNet plans to have a staff of 5,000 by the end of next year. Accenture Ltd. has opened a software-development unit in the northern coastal city of Dalian that will soon boast 1,000 staff. And at its new center in Shanghai, BearingPoint Inc. (formerly KPMG Consulting) aims to quadruple its staff, to 600, by yearend 2004.
So far, China’s role is largely focused on providing back-office support for financial service, telecom, software, and retail companies in neighboring Asian countries. Operators can easily talk to people in Hong Kong and Taiwan in their own languages. China also has plenty of Japanese and Korean speakers. But it is making inroads as an outsourcing base for English-speaking nations, a business dominated by India, because of the influx of Western multinationals who now are bringing back-office work to China.
ConnectITChina, a Shanghai consultancy, estimates China’s software outsourcing revenue will more than double, to $5 billion, by 2005. Gartner Inc. predicts that by 2007 China will pull in $27 billion for IT services, including call centers and back-office work, matching India.
China’s ascent could inflame an already heated debate in the U.S. about companies sending work abroad. With the U.S. economy still struggling and the jobless rate at 6.4%, lawmakers in several states want to make it harder for governments to contract work to low-wage countries. India is the center of attention. But China, which many Americans view as a political and economic rival, is likely to be a bigger lightning rod for outsourcing foes.
Bureau Report
That progress is starting to spread across China. After emerging as the world’s hottest manufacturing hub, China is joining English-speaking countries such as India and the Philippines as a key destination for outsourced service jobs.
Near Guangzhou’s airport, a call center run by Hong Kong’s PacificNet Inc. employs 2,000 Chinese manning the phones for telecom and insurance companies in Hong Kong, Taiwan, and China. PacificNet plans to have a staff of 5,000 by the end of next year. Accenture Ltd. has opened a software-development unit in the northern coastal city of Dalian that will soon boast 1,000 staff. And at its new center in Shanghai, BearingPoint Inc. (formerly KPMG Consulting) aims to quadruple its staff, to 600, by yearend 2004.
So far, China’s role is largely focused on providing back-office support for financial service, telecom, software, and retail companies in neighboring Asian countries. Operators can easily talk to people in Hong Kong and Taiwan in their own languages. China also has plenty of Japanese and Korean speakers. But it is making inroads as an outsourcing base for English-speaking nations, a business dominated by India, because of the influx of Western multinationals who now are bringing back-office work to China.
ConnectITChina, a Shanghai consultancy, estimates China’s software outsourcing revenue will more than double, to $5 billion, by 2005. Gartner Inc. predicts that by 2007 China will pull in $27 billion for IT services, including call centers and back-office work, matching India.
China’s ascent could inflame an already heated debate in the U.S. about companies sending work abroad. With the U.S. economy still struggling and the jobless rate at 6.4%, lawmakers in several states want to make it harder for governments to contract work to low-wage countries. India is the center of attention. But China, which many Americans view as a political and economic rival, is likely to be a bigger lightning rod for outsourcing foes.
Bureau Report