Official from MOFCOM Department of Trade in Services and Commercial Services Comments on China’s Service Outsourcing in 2016

Source: Ministry of Commerce of the People’sRepublic of China

In 2016, against the background of globaltrade and investment downturn, China’s service outsourcing continued to growfast. Offshore service outsourcing has become a major force to promote China’sservice exports and played a great role in optimizing foreign trade structureand pushing industry to climb up the high end of value chains. Official fromMOFCOM Department of Trade in Services and Commercial Services pointed out thatthe development of service outsourcing in 2016 presented the following characteristics:

1. The size expanded rapidly and thenewly-signed contract value broke the record of 1 trillion yuan. Thenewly-signed contract value of service outsourcing in 2016 registered 1.0213trillion yuan (the same currency below), breaking the record of 1 trillion yuanfor the first time, up 20.1% year on year; the executed contract value amountedto 738.5 billion yuan, up 17.6% year on year. Among these, the contract valueof offshore service outsourcing reached 660.8 billion yuan and the executedvalue was 488.5 billion yuan, up 16.6% and 16.4% respectively year on year.China’s offshore service outsourcing took up 33% of the global share, rankingthe 2nd in the world, and the executed value of service outsourcing took up onefourth of China’s service exports.

2.Industrial structure was graduallyoptimized and technology intensive business took up a higher percentage. Newinformation technology such as cloud computing, big data, Internet of thingsand mobile Internet promoted the rapid development of “Internet + serviceoutsourcing” model. Service outsourcing enterprises tend to transform intotechnology and high added-value business. The executed contract value of ITO,BPO and KPO in 2016 was 229.3 billion yuan, 80.9 billion yuan and 178.3 billionyuan respectively, taking up 46.9%, 16.6% and 36.5%, up 11.4%, 35.9% and 15.5%respectively year on year.

3.Professional service was improved andinnovative ability was gradually raised. The number of newly addedinternational quality certificate like CMM for service outsourcing enterprisesamounted to 927 and the average contract value was 5.27 million yuan, up 15.3%and 5.6% respectively year on year. The technical capability and professionalservice of enterprises were constantly raised, transforming from singletechnical service to comprehensive solution service, from project undertakingto strategic cooperation, and from cost-drive to innovation-drive.

4. Demonstration cities for serviceoutsourcing played a cluster and leading role. The executed contract value ofservice outsourcing undertaken by demonstration cities was 456.4 billion yuan,up 15.9% year on year, taking up 93.4% of the national total. Among these, theexecuted contract value of service outsourcingof Beijing, Shanghai, Guangzhouand Shenzhen totaled 138.5 billion, going up 21.3% year on year, taking up28.4% of the national total, playing a leading role in technical and businessmodel innovation. The executed contract value of service outsourcing in tennewly-added demonstration cities in 2016 registered 38.4 billion, up 32.2% yearon year, higher than that of the overall growth of demonstration cities andnational average, and has become a new growth pole of service outsourcingindustry.

5. Cooperation with main insourcing marketswas strengthened and international market was steadily expanded. The executedcontract value of service outsourcing from main insourcing markets like the EU,the US, Japan and Hong Kong registered 308.6 billion yuan, up 19.3% year onyear; that from countries along the “Belt and Road” was 84.1 billion yuan,taking up 17.2% of China’s total. The offshore service outsourcing business hasextended to 201 countries and regions across the world. By undertaking offshoreservice outsourcing, enterprises have upgraded the R&D ability, promotedtechnology, design and standard to “go global” and deepened international tradeand economic cooperation.

6. The work group became stronger and theattraction to college students increased. Service outsourcing industry has 1.21million newly added personnel, of which 800,000 have college degree or above,taking up 65.9% of the total newly added personnel. By the end of 2016, thenumber of employees for service outsourcing industry reached 8.56 million, ofwhich 5.51 million have college degree or above, taking up 64.4% of the total.

The official said in 2017, MOFCOM willstick to the guide line of steady progress, implement new development ideas,accelerate supply-side structural reform, work with the relevant departments tooptimize service outsourcing industry and regional development layout,establish dynamic adjustment mechanism for demonstration cities, boost thefirst-tier cities to improve innovative ability and industrial added value, andpromote labor intensive business to transfer into the second and third tiercities. We’ll genuinely conclude the experience of demonstration cities andstudy to popularize and copy their preferential policies in non-demonstrationcities.

BeijingTianjinShanghaiChongqingGuangzhou ShenzhenWuhanDalianNanjingChendu JinanXianHaerbinHangzhouHefei ChangshaNanchangSuzhouDaqingWuxi XiamenShenyangChangchunNantongZhengjiangNingboFuzhou(Pingtan Comprehensive Experimental Area)QingdaoZhenzhouNanning Urumqi

Copyright:ChinaSourcing Summit

Record Number:2141234