Source: The Times of India
Global services exports revenue in China is projected to increase to at a CAGR of 20-25 per cent from $3.5 billion in 2010, according to Everest Group, an advisory and research firm on global services.
Global services exports from China have been increasing at a continuous pace, surging from about $1.2 billion in 2007 to $3.5 billion in 2010, according to Everest Group’s study, Global Locations Compass: China.
The study reports that ITO services contribute 65 per cent towards China’s total export revenue, driven by in country presence of several global IT services providers. Business Process Outsourcing (BPO) work comprises the remaining 35 per cent.
“China offers a compelling regional language advantage and cost arbitrage and is thus best leveraged to serve the Asia region, which accounts for about 60 per cent of China’s global sourcing revenues,” said Amneet Singh, vice president – Global Sourcing.
“While lack of clear cost and English language skills translate to a limited competitive advantage over India and the Philippines for work exported to North America and Europe, these regions still account for about 40 per cent of China’s global sourcing exports. China can serve as a risk diversification alternative to serve North America and Europe.”
Last year’s market growth in China prompted its reclassification as a mature offshore destination on Everest Group’s Market Vista Locations Maturity Heatmap.
According to the study, weak data privacy laws are among the key risks of operating in China. However, the government is taking steps to rest such concerns by establishing stronger data protection guidelines The report provides an in-depth analysis of China’s global services landscape across captives and third-party service providers for ITO and BPO services to include market characteristics, education system and future outlook.
The study also provides detailed data and perspectives on seven key cities – Shanghai, Beijing, Dalian, Guangzhou, Chengdu, Hangzhou, and Suzhou – spanning across labor pool, cost, market activity and risk analysis.