Sources: New Law to Jolt Outsourcing

China is drafting policy to bestow preferential tax treatment for its firms that focus on information-technology (IT) or business-process outsourcing. “Industry insiders regard this as an effort to overtake India in the outsourcing industry,” writes Shen Jianyuan for “The Economic Observer Online,” adding that the new policies will define and boost an industry now described as “disorganized.” The Chinese outsourcing market for computer programming is $1.09 billion, worth about 2 percent of India’s market. The outsourcing industry has plenty of room to grow, with almost 70 percent of international firms having failed to take any steps in that direction, Shen reports. China confronts a challenge that also confounds India and the developed nations – an immediate need for trained and skilled workers. So China’s policy includes establishing 10 base cities and training programs, designed to attract investment and operations from multinational firms. – YaleGlobal