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Why China |
Since the initiation of economic reforms in 1979, China has become one of the world's fastest-growing economies. From 1979 to 2005 China's real GDP grew at an average annual rate of 9.7%. Many economists speculate that China could become the world's largest exporter within the next few years and the largest economy within a few decades. China's accession to the WTO in 2001 and the success of Beijing's bidding for the 2008 Olympic Games boosted the economic reforms and opened the huge market to the rest of the world. China is now the world's third-largest trading economy after the United States and Germany.
IT Outsourcing is the fastest-growing sector in the China IT services market, with a 2004-2009 compound annual growth rate (CAGR) of 39.9%, though accounting for only 11.5% of the total IT services market in 2004. Outsourcing already accounts for 35.7% of the worldwide IT services market, which is also the growth engine in the worldwide market.
China is also emerging as one of the top BPO service providers in recent years. BPO market in China is expected to grow to $24B by 2008. IDC forecasts the China BPO market will increase quickly with a 34.8% CAGR in 2004-2009.
China's Advantages in Outsourcing
- Educated, skilled urban workforce
- Low wags
- Off-shore manufacturing and outsourcing know-how already there
- WTO entry and increased Chinese efforts at free trade
- Rapidly developing telecoms infrastructure
- China government efforts to privatize and modernize economy
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