Will China Take Outsourcing Market From India?

Filed in archive Outsourcing on May 20, 2007

My hat's off to Arijit Sengupta, or "Apu" as he prefers to be called, at the Rational Outsourcing Blog. Apu made me think about something I don't consider often - outsourcing to China.

Usually, when we think of China's exports we think of stuff. China makes things and then exports them. At least that's the stereotype.

Apu's recent blog post, The secret weapon of the Chinese BPO industry, points out that China's Business Process Outsourcing sector is often more labor efficient than India's. But the BPO industry in China is focused primarily on domestic markets.

If international investment ever takes full advantage of BPO in China to export services (instead of goods), India's BPO companies may well eventually have to look for another line of work.

While I think Apu is right in his evaluation that labor efficiency in China's BPO industry could challenge India's dominance of the international scene, one question that came to my mind as I read his blog had to do with language - with proficiency in foreign languages. If China's BPO industry moved more aggressively into the international scene, could BPO companies there find (or create) the necessary worker with the required language skills? Time will tell. But with English as an official language, India still has a linguistic advantage, I suspect, over China.