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China rated as mature offshoring location

China has joined India and the Philippines as a mature location for offshore delivery of outsourced services according to research by global consultancy Everest.

However, the report, entitled What is the True Maturity of China`s Offshore Services Market?, also finds that the country is best suited for regional work and lacks some capabilities that global companies seek for supporting work from North America and Europe.

The report concludes that China is a mature offshore services destination, but only suitable for regional support as more than three-fourths of China`s offshore services exports are focused on Japan, Korea and Southeast Asia. It notes that China`s primary limitation is a lack of experienced project managers who have the requisite skills to interact with clients in North America and Europe.

Challenges further limiting the scale of offshore services for these geographies are lack of adequate English skills and insufficient cultural affinity.

The report also notes that concerns around data privacy and intellectual property protection persist and constrain the types of services and platforms that buyers are comfortable supporting from China.

"In the last three years, China has witnessed continued interest and activity, with service providers scaling up operations and buyers starting to experiment with more seriousness," said Everest research director Anand Ramesh. "In our advisory engagements, China is frequently cited by buyers as a consideration but is primarily playing a role as a regional centre within their global sourcing portfolios."