China marches into outsourcing

[OhioChick]

April 8, 2008
CHANGSHA, CHINA -- In the foothills of Yuelu Mountain here, a young Mao Tse-tung found inspiration in nature for his political aspirations. Today, Communist Party officials have a different vision for this area: a valley of global outsourcing firms.

One of them, Beijing-based Chinasoft International Ltd., is recruiting hundreds of workers to process medical bills and health insurance claims. Its target customers: U.S. doctors.

Chinasoft is launching the venture with a Tennessee firm, Premier BPO Inc., which has similar operations in India and Pakistan. Chen Yuhong, Chinasoft's managing director, thinks it's only a matter of time before China makes big gains against India -- which now leads the world in information technology outsourcing.

"They're seriously concerned about our challenge," said Chen, 44, who has a doctorate in engineering from Beijing Institute of Technology and speaks fluent English.

Most analysts reckon it'll be perhaps a decade before China catches up. India's IT outsourcing revenue, estimated at $18 billion in 2007, is about six times the size of China's. The gap figures to be even bigger for business-process outsourcing, such as medical billing and back-office work. With its history as a British colony, India has workers with strong English skills and familiarity with Western culture. That gives companies there a big edge when bidding for jobs that require reading reports and talking to Americans.


http://www.latimes.com/business/printedition/la-fi-outsourcing8apr08,0,6718464.story