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China is quickly becoming one of the top destinations for businesses everywhere outsourcing development. There are compelling reasons for China to be at the core of a large and diversified outsourcing strategy.

Deep talent reserves

The talent of Chinese professionals has been underexploited in the past. The Chinese government is working to tap all pools of available human resources—with the software industry one of the six key industries the government has decided to put its weight behind. The government has demonstrated that it will be active in promoting the development of software outsourcing. There are numerous training schools throughout the vast country with the number of students in computer, information, and software project development increasing every year.

Support of Chinese government

Support of this industry by the Chinese government is obviously very important. It means that the depth of training will be increased, and efficient infrastructure and policies will be put into place to support its growth. Tax incentives are one way the government is encouraging companies to enhance the capacities of personnel. As one example, currently companies that achieve CMM certification can benefit from financial incentives from the Shanghai government.

Capacity

In order to be able to offer world-class service more quickly, China has put an emphasis on raising outsourcing capacity. More and more companies have acquired CMM certification from Carnegie Mellon Software Institute. China is proving its competence and gaining international status in its ability to meet outsourcing needs.

The number of project managers who have obtained PMP certification from international management institutes has grown from 80 in 2000 to 5000 in 2004. In addition, more technical staff members have raised their levels of technical competence in handling Java and other network technologies. Many technology experts have demonstrated rich experience and competence in dealing with issues generated by legacy systems and platforms.

Basic facilities

China is in an excellent position to interface commercially with other countries. Qingdao has airport which compares favorably with the best in the world, and offers daily flights to major airports around the globe, allowing smooth and worry-free travel.

Surplus in India

India, which has been the most popular place for software development until now, is experiencing supply and demand imbalances. The popularity and growth of the software development industry has led many employees change jobs frequently, causing a decline in the quality of work. The situation will be difficult to remedy in the short term.

The trend toward diversifying outsourcing

With outsourcing becoming a standard feature of company strategy, more and more enterprises are beginning to consider dispersing their outsourced projects to two or more areas. There are many advantages to this approach, including reducing risk and enhancing bargaining power. Diversification can avoid the problem of overdependence on one supplier.