Companies of all sizes have turned to outsourcing in China, which can free up internal resources, keep overhead under control, minimize liability and ultimately save money. China outsourcing services encompass a variety of industries, including telecommunications, computers, electronics, software and consumer goods. With the right offshore outsourcing service, accomplishing these goals is only the beginning of the benefits of Chinese outsourcing. In addition to sizeable cost savings, outsourcing to China presents additional value by improving process productivity and product quality. 

Chinese economic reform has brought a tide of manufacturers to China from neighboring technology hubs like Korea, Taiwan, Hong Kong, and Malaysia. The ripple effect was that US manufacturers followed suit. In response to the demand for skilled labor, Chinese colleges are turning out waves of highly skilled programmers, moving China to the center of the international IT outsourcing boom, in addition to its position as the world’s manufacturing leader.

Here are some of the most compelling reasons for outsourcing to China:

1.      High literacy level and education level including (knowledge on latest technology and manufacturing processes)

Over 90.9% (male: 95.1%; female: 86.5%) of the population over age 15 are literate. China's youth (age 15 to 24) literacy rate was 98.9% (99.2% for males and 98.5% for females) in 2000.In March 2007, China announced the decision of making education a national "strategic priority", the central budget of the national scholarships will be tripled in two years and 223.5 billion Yuan (28.65 billion US dollars) of extra funding will be allocated from the central government in the next 5 years to improve the compulsory education in rural areas.

Many parents are highly committed to their children's education, often investing large portions of the family's income on education. Private lessons and recreational activities, such as in foreign languages or music, are popular among the middle-class families who can afford them

China has the world's second largest research and development budget, and is expected to invest over $136 billion in 2006 after growing more than 20% in 2005 the past year.The Chinese government continues to place heavy emphasis on research and development by creating greater public awareness of innovation, and reforming financial and tax systems to promote growth in cutting-edge industries.

2. Cheap Labor

Some companies have achieved costt savings of 30-60%. Hence outsourcing to China enables companies to the opportunity to reduce manufacturing costs by up to 70% with very few risks. Why is it cheaper to outsource product manufacturing or outsource technology services such as Web site design and development to China? In a nutshell: low-cost labor and high quality products and services. According to a survey conducted by InformationWeek China, the monthly salary for programmers in high-tech hotbeds such as Beijing and Shanghai is between $600-950 a month, which is approximately half of what technology professionals make in India and less than a quarter of going rates in the US. In secondary locations like Dalian, a coastal city in northern China, salaries average only $450 a month.

China has long been a leader in manufacturing services; in fact, manufacturing accounts for a large percentage of its outsourcing revenue. It is well known that manufacturing goods in China presents significant cost savings over US production—as much as 30-60 percent. Instead of remaining content with dominating factory product outsourcing, China has risen to the occasion by making a strong entry into IT outsourcing.

There are more and more technology professionals entering the marketplace thanks to U.S. tech firms like Cisco Systems, IBM, Microsoft and Sun Microsystems, and the Chinese government, which has established 35 national schools that provide software training, especially in technologies such as .Net, Linux, Java, and Web development services.

3. Language

English has attained the level of China's second language.

Government has made the National English proficiency test mandatory for B.A and M.A.

4. Faster time to market

China is the manufacturing plant of the world providing sound base for outsourcing strengthened by risk mitigation and greater stability.

Also, China sits next to Japan, world's second largest economy, and shares cultural and historical background with it. Therefore an increasing familiarity and economic integration is visible between the two countries.

Thus one can conclude the growing economic fabric of China will create a vibrant outsourcing environment making it your next IT source location.

5.      China, A Great Place to do Business

To attract foreign partnerships, the Chinese government passed laws protecting ownership and intellectual property in the country. To encourage commerce in the outsourcing sector, China has embraced public and private partnerships and domestic and foreign partnerships alike.

While India has dominated IT outsourcing historically, with China at the forefront of manufacturing, the tide has turned, placing China at the head of the class in both categories. Concerns over the trend reversing are unfounded. Investors in the Chinese outsourcing market won’t face the kind of wage inflation experienced in India as demand catches up with supply. In China, several hundred thousand students graduate every year with technology degrees; the rate in India is not even close.