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Service outsourcing efforts gathering speed

Updated: Jan 15, 2020 China Daily Print
A salesperson introduces Alibaba's AliExpress platform to a customer at a wig shop in South Africa. [Photo by Niu Jing/For China Daily]

China will further boost the service outsourcing industry and step up digital transformation in key sectors such as cloud computing and software, said a guideline issued by the Ministry of Commerce and seven other ministries and commissions on Tuesday.

By 2025, China's offshore service outsourcing will be able to further strengthen its position as the main channel for service exports, and the proportion of digital services with high technology and high added value will continue to increase, said the guideline.

"The average annual output value of China's service outsourcing employees will be the largest in the world by 2035."

Outsourcing is a business practice where a company hires another company to perform tasks. In recent years, the new wave of technology advancement has generated opportunities for Chinese service outsourcing providers to transform and adapt to the digital era.

Thanks to the widespread application of the new-generation information technology, the service outsourcing industry has featured digitalization, intelligence, high-end and integration, said the document.

To further transform and upgrade the industry, the guideline has laid out several major tasks, for instance, accelerating digital transformation.

A major task is to bolster information technology outsourcing. IT-related research and development and applications, such as cloud computing, basic software, integrated circuit design, and blockchain can gain funding support from the national science and technology plans, according to the guideline.

In addition, more efforts will be made to bolster new models. "China will rely on 5G technology, to vigorously develop new models such as crowdsourcing, cloud outsourcing, and platform subcontracting," the document said.

Xing Houyuan, director of the China Service Outsourcing Research Center, said that "the thriving service outsourcing industry will help empower the traditional service sector."

Xing said the rapidly developing information technology has penetrated into a lot of fields. He said there have been a large number of cutting-edge technologies that rely on artificial intelligence, especially in the financial services sector.

Zhang Dongwei, chief marketing officer of Pactera Technology International Ltd, said: "The service outsourcing industry has been gradually evolving from labor oriented to technology oriented in recent years."

An increasing number of Chinese outsourcing providers have been enhancing their technological and innovative capabilities, Zhang said.

Between January and September 2019, the service outsourcing industry in China grew steadily, data from the Ministry of Commerce showed. The value of service outsourcing contracts signed by Chinese enterprises amounted to 886.4 billion yuan ($128.8 billion) in the nine-month period, up 4.4 percent year-on-year.

The sector helped create 449,000 new jobs in the first three quarters of last year. By the end of September, a total of 11.13 million people were working in the sector, 64.5 percent of whom had a college degree or above.

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