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Analyst: China Poised to Grow in IT Services

The top 10 Chinese outsourcing providers employ a total of 85,000 people. That may sound like a lot, but it's small relative to the number in India, where one outsourcing firm alone employs 187,000 people.

Yet China's IT service providers are in a good position to grow in the years ahead, according to outsourcing consultancy TPI.

"What's interesting, and perhaps coincidental, is that the size of the leading Chinese providers today by employee and revenue is roughly equivalent to the size of the leading providers in India a decade ago," said Michael Rehkopf, a partner and director at TPI.

Rehkopf said he won't be surprised to see "Chinese service providers take off quickly and dramatically in the decade ahead."

But what could hurt China's outsourcing growth is increasing competition from other nations, and intellectual property protection issues, Rehkopf added.

China's outsourcing industry may not focus on the U.S. market like India's has, predicted John Keppel, TPI's president. Whereas the major Indian IT service providers count on business from U.S. customers for more than 50% of their revenue, China-based companies have a substantial domestic market to tap, as well as the large economies of nearby Japan and Korea, he said.

This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.

Read more about management and careers in Computerworld's Management and Careers Topic Center.


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