China’s outsourcing industry has maintained a strong business growth in the first

half of this year although the financial crisis has reduced demand from foreign

companies such as big banks and insurance companies.
Contract value of China’s outsourcing industry rose 32.5 percent to $2.56 billion in

the first half of 2009, the Ministry of Commerce (MOC) told a press conference

yesterday.
There were over 1,400 newly incorporated outsourcing enterprises in the first half,

and as many as 297,000 people joined the industry during the same period.
Sun Peng, deputy chief of the MOC’s Department of Foreign Investment Administration,

attributes the upsurge in the industry to the following factors: the outsourcing

industry enjoys a sound investment environment in China, the country offers a well-

built infrastructure, and abundant talents in the hi-tech sector, and there is rising

domestic demand in the industry.
Local governments at different levels provide incentive policies for the outsourcing

industry, as it is regarded as a means to switch their economic structure in a hi-

tech and service-oriented fashion, instead of relying on labor-intensive industries.
The added cost pressure from the global slowdown also drives foreign firms to

transfer their non-core businesses to China, Sun added.
In order to help it transform from a manufacturing base to a service hub, China aims

to double in five years the export value of the outsourcing industry by 2010. By

achieving that, the government announced earlier that it plans to woo some 100

multinationals to transfer part of their service outsourcing industry to China by

building 10 cities with international standards.
It also plans to help 1,000 Chinese outsourcing companies grow into medium to large

size enterprises in the five-year period.