China's outsourcing industry has edge over India

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BEIJING, June 23 (PTI): China's information technology (IT) services outsourcing industry is poised to boom and enjoys distinct advantages over that of India due to huge domestic market and its close interaction with local clients in service and manufacturing industry, experts have been quoted by the Chinese media as saying.
"China's large and fast-growing domestic IT services market is a great strength for its outsourcing industry," corporate vice-president and managing director of Electronic Data Systems (EDS), China and South Korea, David Wirt has said.
Unlike their Indian counterparts, outsourcing companies in China work closely with local clients from industries such as banking, securities and manufacturing. These experiences allow them to develop their own domain expertise and enhance innovative capacity.
"This is impossible for Indian outsourcing companies due to their small local market," Wirt said. "They have to buy expertise and knowledge due to the small domestic market," Wirt was quoted as saying by 'China Daily'.
China has been promoting its outsourcing sector to rival that of market leader, India. Chinese provinces have vying with each other in offering foreign companies favourable polices and tax breaks to set up call centres and offices.
China's software outsourcing companies raked in USD 1.4 billion in revenue in 2006, up more than 40 per cent compared to previous year.
The sales volume of China's software industry grew 23 per cent year-on-year to 480 billion yuan in 2006, the ministry of information industry said.
The ministry also predicted China's market for software and information services would reach one trillion yuan by 2010.
Meanwhile, according to the forecast made by EDS, outsourcing services could generate USD 56 billion in revenue and create four million jobs by 2015, becoming a new engine for China's economic growth.