Software Development Outsourcing from India to China

I recently read a white paper about "WHY INDIAN SOFTWARE OUTSOURCING COMPANIES ARE OUTSOURCING TO CHINA". Author Paul M. Denlinger, Publication Date: December 10, 2007

It’s a report of how the author thought about the software outsourcing situation in India and China. Here’s some of his views to explain his question, “why indian software outsourcing companies are outsourcing to china”.

  1. Chinese Government is poised to make a great leap forward in the IT outsourcing service field
    2. IT won't worsen the environment of China, so it's supported by government now.
  2. Indian IT services are growing, and accounting for 7% in 2006 from 1% in 2002.
    3. Actually I doubt this quote. seems the indians now charge as much as 70% of american programmer does.
  3. West IT services giants are competing with SWITCH, the 6 main IT services companies in India for employees
  4. Which makes to some downsides:
    • very high employee turnover
    • limited infrastructure forced expansion into second-tier cities
    • expand investment in infrastructure, futher straining their resources
    • foreign exchange reason, indian rupee against USD
    • shortage of qualified IT talent
    This makes sense. I don't know India, but high employee turnover is not strange now in China.
  5. Demand for indian IT personnel going to a breaking point
  6. Complaining from west
    7. about the ever lower quality against ever higher price.
  7. India doesn't have time for organically grow, they need china
    8. of its great talent pool.
  8. Chinese Government policy encourage new tech industry
  9. China has good intelligent and VCs come to China
    10. to take most of created value away, hehe.
  10. Chinese IT cities are going inland provinces
    11. absolutely.
  11. According to a report released by Dallas-based Alsbridge Consulting in June 2007, Chengdu would be the next top IT development city in China
    12. well, I'm in Chengdu. It's true.
  12. Graduates from inland cities prefer to work there, and they don't like traditionally-run chinese companies
    13. because here's something called "HuKou" in China.
  13. China has better tier two cities than India does
  14. Chinese tech talents love US ways of management
    15. they love freedom, and less management.
  15. US are afraid of the stealing of IP: Knowing this, the leading Chinese software outsourcing firms offer to sign IP agreements with their American customers which are governed by US intellectual property laws.
    16. Correct. The protection of Intellectual Property is not what chinese people put value on. But this issue would be solved as china is integrating into the world.
  16. Indian firms wanna take use of chinese, but mostly they did it badly.
    17. oh, they don't know china.