Yesterday, I said I’d be drilling down on the China analysis that’s part of the Global Outsourcing Report.
Here are the risks inherent in setting up shop or working with a service provider based in China that stand out to me in the report:
- The conflict with Taiwan is a biggie.
- Corruption is rampant, especially as you get farther away from Beijing.
- There’s a fear that the Chinese government could seize your business.
- Chinese culture is much further from Western culture than India.
- There’s bad intellectual property protection.
- There’s a copy-cat mentality.
- Tax grace periods are expiring.
- Power outages exist even in the biggest cities.
Here are the promising points:
- The marketing opportunities are to slobber over.
- There’s a labor force of 778 million, although there are only about 200,000 people working in IT currently.
- There are almost more students of the English language in China than there are in Great Britain.
- Real estate costs are low.
- There are strong skills among the IT labor force in writing custom software.
- Many organizations already have outsourcing ties to Chinese companies through their manufacturing/production operations.
