While the manufacturing sector is getting slightly jittery about the signals being put out by the Chinese government (China is to cut tax rebates on exports of low-value-added, high-energy-consuming, resource-intensive and environmentally harmful products), another sector is about to receive favored treatment. Ten bases for service outsourcing are to be set up in the next five years in China, in a bid to attract multinational investment. China is also to encourage investment in new technologies for the service sector, particularly electronic commerce, logistics, design and finance.
This doesn’t sound like the actions of a government particularly concerned with a possibly “overheating economy”. Instead, it seems as China’s economy matures, the government is shifting focus to add service outsourcing to manufacturing in its portfolio to sell to the world. Not so much a dramatic cutting of the trade surplus as simply a change of its content.
Thus far, India, with its English-speaking graduates, has been the call center capital of the world. China doesn’t just want a piece of its neighbor’s action, but to be “the main international outsourcing service base within the next five to 10 years”. India has the language and the head start; China has the infrastructure. To win, it also needs to overcome an image problem and convince multinational companies that potential employees in China can adapt to dealing with customers from other cultures. A long shot? India will certainly be hoping so!