Support offered to help service sector expand
China aims to give its service outsourcing industry a boost, and policies that will attract top talent and help the sector expand could be rolled out this year, Qu Lingnian, president of the Beijing Association of Sourcing Services, said on Friday.
Qu made the comment after attending the Chinese Outsourcing Leadership Summit in Tianjin.
Supporting overseas mergers and acquisitions by domestic outsourcers could also be part of the plan, Qu said.
The Ministry of Commerce has been studying these possibilities. It's submitted a request for further incentives to the State Council, China's cabinet, which is said to have received a positive response.
"The industry is waiting for a follow-up to Circular 33," said Qu.
In February 2013, the cabinet released that document, in which it announced a five-year development plan for the outsourcing industry.
Local governments responded by offering incentives, including special funds to promote service trade development.
They also came out in support of changes to the tax rules, which would require outsourcing companies to pay value-added taxes instead of corporate income tax.
Tax breaks are "vital" to the industry and will likely continue, Qu added.
As the industry boomed in 2013, Chinese contractors took $62.34 billion through international service outsourcing activities, up 42.2 percent year-on-year, Ministry of Commerce data showed.
Employment in the sector rose by 1 million to 5.36 million in 2013, with 24,818 companies engaged in the business, according to the Xinhua News Agency.
The figures probably involved some double-counting, said Qu, but the industry "still achieved a steady growth curve under incentives".
Shen Danyang, spokesman of the Ministry of Commerce, said this week that in the first two months of 2014, information technology outsourcing accounted for almost 60 percent of offshore outsourcing, underscoring its dominant industrial status.
Although the government is supporting offshore IT services, Qu said: "We won't abandon offshore IT outsourcing, but the industry should focus more on 'onshore outsourcing' in the future.
"It seems likely that IT services will be likely some day to blend into traditional industries and then the concept of 'outsourcing' will fade away."
Tang Zhenming, executive director of IT outsourcing firm ChinaSoft International Ltd, agreed. Tang said that with the emergence of new technologies, a crossover between the service industry and traditional industries will occur.
In terms of developing offshore outsourcing, Qu said China's top advantage is that companies in the nation can adapt advanced service models and concepts used overseas.
Supporting overseas mergers and acquisitions by domestic outsourcers could also be part of the plan, Qu said.
The Ministry of Commerce has been studying these possibilities. It's submitted a request for further incentives to the State Council, China's cabinet, which is said to have received a positive response.
"The industry is waiting for a follow-up to Circular 33," said Qu.
In February 2013, the cabinet released that document, in which it announced a five-year development plan for the outsourcing industry.
Local governments responded by offering incentives, including special funds to promote service trade development.
They also came out in support of changes to the tax rules, which would require outsourcing companies to pay value-added taxes instead of corporate income tax.
Tax breaks are "vital" to the industry and will likely continue, Qu added.
As the industry boomed in 2013, Chinese contractors took $62.34 billion through international service outsourcing activities, up 42.2 percent year-on-year, Ministry of Commerce data showed.
Employment in the sector rose by 1 million to 5.36 million in 2013, with 24,818 companies engaged in the business, according to the Xinhua News Agency.
The figures probably involved some double-counting, said Qu, but the industry "still achieved a steady growth curve under incentives".
Shen Danyang, spokesman of the Ministry of Commerce, said this week that in the first two months of 2014, information technology outsourcing accounted for almost 60 percent of offshore outsourcing, underscoring its dominant industrial status.
Although the government is supporting offshore IT services, Qu said: "We won't abandon offshore IT outsourcing, but the industry should focus more on 'onshore outsourcing' in the future.
"It seems likely that IT services will be likely some day to blend into traditional industries and then the concept of 'outsourcing' will fade away."
Tang Zhenming, executive director of IT outsourcing firm ChinaSoft International Ltd, agreed. Tang said that with the emergence of new technologies, a crossover between the service industry and traditional industries will occur.
In terms of developing offshore outsourcing, Qu said China's top advantage is that companies in the nation can adapt advanced service models and concepts used overseas.
