The growing outsourcing market in China is not having the effect the Chinese government is looking for according to a new report by Ovum.
The Chinese government has set up 20 cities for outsourcing business and the made large investments in infrastructure, education, training and tax incentives in an attempt to grow business.
However, Ovum senior analyst Patrick O’Brien, has produced a report showing that the Chinese outsourcing market is being dominated by foreign players in the sphere who are setting up their own Chinese subsidiaries.
“Although the Chinese government is taking measures to build China as a service based economy, there are no signs of a Chinese equivalent of a Tata Consultancy Services or an Infosys emerging, capable of challenging the Western major vendors for the foreseeable future,” he said.
“Western providers have invested in Chinese delivery centers having learned their lesson from the procrastination many showed when India emerged, which effectively allowed India’s domestic vendors to build themselves into global players.”
Part of the problem lies in the fact that many of the Chinese outsourcing companies are state-owned, but that the Chinese government isn’t signing deals with them.
Another problem he highlights is China’s poor marketing skills in advertising themselves top new market opportunities.
This has been made worse by two government departments trying to promote outsourcing - the Ministry of Commerce and the Ministry of Industry and Information Technology.