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Outsource magazine: thought-leadership and outsourcing strategy | August 18, 2017

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China is good to go

China is good to go
Martin Conboy

With economic globalisation and international industrial restructuring, the world service trade market has gained momentum and as a result industrial restructuring has gained speed.

As a result, emerging industries such as ITO, BPO, and KPO have gradually become the mainstream forms of international service trade.

China’s service outsourcing is gradually expanding from basic transactional work to more advanced businesses. The Chinese service outsourcing sector has moved from low-end customer transaction work to biomedical R&D, hi-tech R&D, industrial design and other high-end processes.

In 2011, over 4,200 service outsourcing enterprises were established in China. This is on top of the 17,000 Chinese outsourcing companies already in existence. Most of these companies have all of the now-standard international certifications, such as CMMI, ISO27001/BS7799, SA70 and SWIFT.

Given the central government’s policy to transition China into a service economy, the central government has designated some cities and industrial parks as the pilot locations. One such location is Wuhu City, which we visited late in August. These people are deadly serious about their intent to build world-class facilities. What we saw beggars belief: the size and scale of the construction was truly amazing; we saw a city being built in front of our eyes where only months ago there were rice fields.

Some years ago I heard the then-Indian Minister for IT say, “My job is to turn India from a nation of snake charmers into a nation of mouse clickers.” Similarly China is moving from a “Made in China” tag line to a “Serviced by China” tag line.

If you ever wondered what was fuelling the resources boom in China look no further than Wuhu City. The shingle is out and they are good to go. Very few in the BPO world will be aware of what’s materialising in the city of Wuhu. It’s extremely unlikely that many readers have even heard of Wuhu.

But, as China races towards building a service- and innovation-based economy, regional cities such as Wuhu are at the forefront of the developing outsourcing, technology and services industries in China.

Located in the province of Anhui, Wuhu is a prefecture-level city with a population of nearly four million people. With a sophisticated economy where the average per capita GDP is RMB47,000 ($7,400), Wuhu is the manufacturing home for Conch Cement and Chery car company (two of China’s largest companies).

The government has aggressively got behind the city and left no stone unturned. As one travels around metropolitan Wuhu it’s hard not to be impressed by the level of construction. It’s incredible in every sense of the word. The phenomenal skyline is overwhelmed with construction cranes as rows upon rows of massive office and apartment blocks are being built. To fill these buildings Wuhu is looking to attract local and international companies and BPO providers to establish service and hi-tech industries.

The overall aim, as stated in the Chinese 12th Five Year Plan announced in 2011, is to take China from being a manufacturing export orientated economy to an service orientated economy built on technology and innovation. These people do not mess around: they are hard at work building an economy that we can only marvel at in the western world.

The Chinese outsourcing industry is not looking to be another India, servicing the needs and requirements of North American and European markets, but to develop and service local in-country industry and markets. Mr Xi Nanshan, Leader of the Wuhu Hi-Tech Development Zone, explains: ”In Wuhu we can provide companies looking to establish operations in China, with all the infrastructure, back-end facilities, and human resources to quickly set up their business here.”

The Outsourcing Park in Wuhu’s Hi-Tech Development Zone was originally established in 2009 and was purely geared to attracting Chinese companies. However, since the middle of 2012 it has reached out to international companies. So far some 70 organisations have come to Wuhu including Lenovo, a major global manufacturer of laptops and PCs, and Biz Plus who have sponsored the development of the outsourcing plaza in Wuhu. They aim to attract over 1,000 businesses to setup in Wuhu over the next year.

Asked why companies should come to Wuhu, Mr Xi stated: “In Wuhu we produce 130,000 graduates from our universities and colleges each year, providing a highly skilled and motivated labour force.” There are seven major institutions – including Fudan University, Hefei University of Technology and the University of Science & Technology – located in Wuhu.

He went on to say: “Situated on the mother river of China, the Yangtze River, Wuhu is a major transportation hub, which will be re-enforced with the introduction of the Shanghai bullet train service in 2013, (allowing for a commute time of 1½ hours), and the construction of an international airport by 2014. We can provide all the power and water resources organisations may need to operate data centres and other hi-tech facilities.”

To showcase what is happening in Wuhu the latest APOE (Asia Pacific Outsourcing Executives) Conference was held there at the Conch Hotel and Convention Centre, where speakers from China, India, Philippines, the Middle East and Australia shared information about the latest trends in outsourcing, technology and social media.

On the last day of the conference, delegates and guests were taken on a guided tour of Wuhu and saw first hand the remarkable range of facilities being built in the Outsourcing Industry Park.

Wuhu has very big plans for its future. So don’t be surprised if in the near future someone from Wuhu comes knocking on your door. If you had not heard of Wuhu before, I can assure you will definitely hear the name in the future as it will become a global brand that will one day match Silicon Valley and Bangalore as magnets for technology innovation.

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