Here’s something Americans aren’t used to hearing: Instead of U.S. jobs being outsourced overseas, some Chinese companies are embarking on a new venture — outsourcing to the U.S.
Call it "reverse outsourcing” if you want.
Chinasoft International Ltd. is a good example of this emerging practice. The Beijing-based company is seeking workers in the U.S. to complete health insurance claims and medical bills and process the paperwork for U.S. doctors, the Los Angeles Times reported.
Chinasoft is working with Premier BPO Inc., a Tennessee firm which has already made its footprint in India and Pakistan working with companies there that want to outsource to the U.S.
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Chen Yuhong, Chinasoft's managing director, says China is not far behind India which has been successful in its outsourcing of information technology workers .
"They're seriously concerned about our challenge," said Chen
The majority of analysts believe it will be at least another 10 years before China can be a rival to India, the LA Times reported. However, India's IT outsourcing revenue has been estimated at $18 billion in 2007 and is about six times larger than China's.
Still China is catching up quickly. Analysts International, a consulting firm, said China’s sales of IT outsourcing work increased by 45 percent in the fourth quarter of 2007 to $600 million. Even though that figure included clients in Japan and other Asian countries, China is making its mark.
The government launched a program in 2006 to cultivate 1,000 Chinese outsourcing companies that would cater to 100 international clients. China is offering firms many incentives from waiving taxes for two years to receiving subsidies for employee hiring and training.
In smaller cities such as Wuhan, Jinan and Changsha, junior software engineers are paid anywhere from $170 to $250 a month. That is only a third of the rates in Beijing or Shanghai, said Tian Yuqi, human resources manager at VanceInfo Technologies Inc., a Beijing-based IT outsourcing firm listed on the New York Stock Exchange.
Compared to India, those wages are a fraction of what India's outsourcing hubs such as Bangalore and New Delhi are receiving, the LA Times reported.
"China enjoys the cost advantage, but India enjoys the market advantage," Tian said.
Mark Briggs, chairman of privately held Premier BPO, said China can become a leader in outsourcing.
"I personally believe China will overtake the rest of the world in BPO," or business-process outsourcing, he said.
Microsoft has invested in larger cities such as Beijing and Shanghai for many years, but only in the past four years did it move into smaller towns such as Changsha, where it is overseeing a small outsourcing project.
"They have a lot of talented people," said Xuedong Huang, a general manager at Microsoft Corp.'s communications innovation center in Redmond, Wash. and a graduate of Hunan University in Changsha. "I've been very impressed with the quality, even by Microsoft standards."
It still remains to be seen whether Changsha, which has a population of 6 million — much smaller than the major cities of Beijing and Shanghai — can one day become a larger player in the Chinese outsourcing market.
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