Analysis of the Outline of Development Plan for China’s International Service Outsourcing Industry (2011-2015)”
Source: Chnsourcing View: 474 Date: 2013-02-06

“The Twelfth Five-Year Plan on National Economic and Social Development” proposes to significantly develop service outsourcing and set up outsourcing bases. Following which, the Ministry of Commerce and the National Development and Reform Commission jointly released “Outline of Development Plan for China’s International Service Outsourcing Industry (2011-2015)” (Hereinafter referred to as the "Outline") days before. The Outline is the first development plan specialized in service outsourcing industry, which has a significant guiding role to the industry for pursuing sustainable development and upgrading during the “twelfth five-year” and future.

Guided by “Thousand-Hundred-Ten” Project, Chinese Outsourcing Industry has a leaping development with the support of national and local governments. From January to September 2012, the contracted value undertaken by outsourcing companies reached 41.21 billion USD, up 43.9% from 2011. The executed contract value was 30.68 billion Yuan, risen by 53.4% YOY. Of which, the offshoring contracted revenue reached 28.55 billion Yuan, risen by 36.4% compared to 2011 and the executed contract was 21.18 billion Yuan, increased by 45.9% YOY. In addition, New technologies represented by cloud computing have facilitated Chinese outsourcing industry to enter into Era 2.0 showing quite a lot of new features and tendencies. Below is a market-oriented Outline and appearing 5 features:

1. Trading center: the Outline proposes to establish 1 – 2 globalized service outsourcing trading center to become the distribution and communication center for International outsourcing business and effectively make up the gap of Chinese outsourcing system. With the declining global offshore business, the establishment of the trading center accelerates the resources convergence and shortens the transaction process and duration, pushing the outsourcing market system and mechanism to be more completed and matured.

2. Company innovation: the Outline sets “substantial improvement in proprietary innovative capability” as one of the goals, which puts forward to improve the brand influence and requires to reach at least 3,000 international certifications and accreditations granted by companies and over 1,500 technologically advanced companies. The formation of the industrial cluster guides Chinese outsourcing industry onto the road to value-driven and innovation –oriented industrial upgrading.

3. Going out Strategy: under the trends of backsourcing and insourcing, the Outline encourages outsourcing companies to formulate “going out” strategy and make the foreign investment to set branches and delivery centers in the formation of M&A, JV or share buying so that taking advantages of international resources and establishing international strategic system to enhance global business and operation capabilities.

4. Capital: the Outline points out to complete efficient investment and financing system to improve financial services for international outsourcing and encourage companies to make the listing. A great number of financial institutions and private equity funds will get entry into outsourcing sector by government’s guide. The capital factors probably boost Chinese outsourcing to raise multiple hyper-large companies that could compete with global leading organizations.

5. Platform: both central and local governments have accumulated great practical experience and made a considerable progress on the development of service outsourcing over last years. Various public platforms for training, techniques, information and research & study have been established successively. The Outline indicates to accelerate the step on the construction of public platforms in the future that substantially reflects the maturing industrial environment as well as effectively facilitating the development and evolution for Chinese outsourcing industry.

The specific policy mechanism of Chinese service outsourcing industry has been determined to continue in use as the “Outline” was issued. It not only reflects the determination and ambitions of Chinese government, but also implies another round of huge wave of development of the service outsourcing sector.

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