Subba’s Serendipitous moments

March 5, 2007

China making a bid for the service outsourcing piece

Filed under: Uncategorized — Subbaraman Iyer @ 4:46 pm

China’s global ambitions continue unabated. After having becoming the global manufacturing hub, it is now slowly training its guns on the growing service outsourcing pie.

China believes that the service outsourcing is where the future growth ahead and that the sector’s multiplier effect on the economy is so attractive that it cannot be ignored. It also believes that inviting FDI in this area (which means US and Indian majors) would solve the problem.

I am not sure whether China has the necessary attributes to be a global services hub and the approach that it takes is the right one, by throwing money at the problem. It would simply take China about 20 years to gain even a semblance of leadership in this area.

All the Indian services firms (Infosys, TCS, Wipro, Satyam) all have set up operations in China, growing their operations there. It would be interesting to see how the "Chinindia" model works out.

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