Dalian Sees Outsourcing Industry Boom

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Feb. 28 – As one of China’s “21 outsourcing model cities,” Dalian’s software and service industry reported total sales revenues of US$8.1 billion and export revenues of US$1.8 billion last year, a respective 33.75 percent and 28.6 percent increase from a year earlier. The industry is also providing over 100,000 jobs in the northeastern Chinese city.

Statistics from the Dalian Foreign Trade and Economic Cooperation Bureau show that at the end of 2010, the amount of professional software and service outsourcing enterprises in the city hit 941, with 56 of them listed as Fortune 500 companies. The government is currently developing a software park in the Dalian High-tech Industrial Zone with the plan of reaching an output of US$15.2 billion and attracting a total investment of US$7.6 billion within the next five years. The software park alone is expected to provide over 200,000 working opportunities by 2015.

Information technology outsourcing (ITO), business process outsourcing (BPO), and knowledge process outsourcing (KPO) are currently the three pillar industries that dominate Dalian’s outsourcing market. Six of the world’s top 10 ITO and KPO service providers have set up businesses in the city. In addition, new types of outsourcing industries are sprouting up, such as financial and insurance services, digital trade, internet, animation and industrial design.

While most of Dalian’s service outsourcers still target Japan as their major market, as it imported 80 percent of their services last year, many businesses are now turning to European and North American markets for more opportunities. A significant number of market-oriented service outsourcing projects have settled themselves in the software park.

Dalian should thank the government’s support and the attraction of information technology (IT) talent training projects for its thriving outsourcing industry. As one of the cities that receive the most government funds for service outsourcing development over the past three years, Dalian obtained US$4.7 million in government funds in 2010. Also last year, the India-based IT education and training company NIIT started its development in Dalian and signed a training memorandum with the formerly GE-owned business process and technology management company Genpact, to make Dalian a training center of the national BPO human resources in Northeastern China.

Dezan Shira & Associates maintains an office in Dalian specializing in payroll outsourcing. To contact the office please email dalian@dezshira.com. You can also visit the firm’s web site at www.dezshira.com or download the company brochure here.

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