Japan Becomes the No. 1 Transferor of Offshore Outsourcing Services with China

12th, September, 2007

Offshore Outsourcing Services Report of China 2007 first released in 10th, Sep. in Xiamen shows that China now undertakes most of its offshore outsourcing services from Japan, South Korea, US, Europe and other places, of which Japan is the biggest transferor of offshore outsourcing services undertaken by China. It is predicted that Europe and America will significantly increase their proportion in the coming 3 years.

The “Report” shows that the Chinese market capacity of offshore outsourcing services is 1.38 billion US dollars in 2006, increasing 48.4% compared to 2005 and the average compound grow rate is expected to reach 37.9% in the following 5 years. Of all the offshore outsourcing services, 55.8% of them are from Japan, South Korea and Europe, US accounted for 35.8%.

Apart from the Southern China, Japan has become a major source of offshore outsourcing services in China. In terms of business scale and development prospects, those major cities undertaking offshore outsourcing services from Japan could be divided into three classes: currently, the first class cities are Dalian and Beijing, which own absolute advantage over others, because 45%-50% of the offshore outsourcing business with Japan are undergone in those two cities.

Shanghai, Nanjing, Shenyang, Xi’an and Hangzhou belong to the second outsourcing services class, while Jinan, Chengdu, Shenchen, Guangzhou and other cities involved in software outsourcing services with Japan go to the third class.

Offshore outsourcing services provided to Europe and US will grow rapidly in the coming years. The “Report” predicts that the outsourcing business from Europe and the United States will surpass those from Japan and South Korea in 2009. The Chinese government has already given more attention to outsourcing services markets of Europe and US, and along with the initiatives of the Ministry of Commerce, Ministry of Information Industry, Ministry of Science and Technology’s identification of "Chinese Outsourcing Base Cities" and the successfully launched “Project of China exporting Software to Europe and US” supported by the Ministry of Science and Technology, the Chinese outsourcing services providers will rapidly further expand Europe and the United States markets. Dalian, Beijing, Shanghai, Shenchen and other cities are expected to quickly establish the leading position in the Europe and US software outsourcing market.

The Offshore Outsourcing Services Report of China 2007 is jointly released by the China International Investment Promotion Council, Sino-Europe International Business School and China Research Center of Outsourcing Services.