28) Challenges and Opportunities Coexist in Chinese Software Outsourcing Industry

According to an official survey, the Chinese software outsourcing market revenue increased dramatically in recent years with an average compound annual growth rate of over 36.2%, which was much higher than expected. Looking into the software outsourcing market, we can easily tell that there are three driving factors for those developments. The first one can be attributed to the supportive policies and financial benefits announced at all levels of the administrative framework. Next, is the prosperous software industry and the relatively low cost of human resources. Finally, the increasing demands from the Japanese, European and American clients attract many more companies to take the lion’s share.

However, problems such as the lack of experienced professionals in the Chinese market are becoming more serious. Current IT professionals in China are rarely proficient with English. This impedes their communication with overseas professionals and thus there become fewer opportunities to work abroad. In addition, many experienced professionals with English proficiency have gone abroad for high-paid jobs. So without enough experienced professionals or returnees, it is difficult for Chinese software outsourcing companies to compete with counterparts abroad.

Chinese government has looked into the problems and taken measures to address them. Despite this hindrance, experts also predict that from 2007 to 2010, China will become one of the largest offshore IT outsourcing providers. The software corporations should have a clear mind about their oversea outsourcing prospect and draw up effective and concrete strategies to utilize China's booming market as an offshore outsourcing country.