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Outsourcing IT to China. Fear not?

Just read a post on the Computer Weekly Blog entitled, "Would you offshore your IT to China?" (h/t to the China Outsourcing Blog). The post talks quite a bit about US listed Chinese outsourcing company, VanceInfo and its recent merger of equals with HiSoft to form Pactera Technology International. My firm has represented VanceInfo for many years so I am going to remain silent on the merger, but that representation has given me a somewhat inside look at how China is perceived as a destination for IT outsourcing.

The Computer Weekly article also polls its readers as to whether they would outsource their IT to China and at this point the yes votes are tied 1-1 with the no votes. What I find fascinating is how many companies are so much slower to outsource to China than they are to India and their explanation for that is often something along the lines of how China is the wild wild west or that it has no IP laws. The funny thing about this is that each year the US Trade Department does a priority watch list of the worst countries on IP protection and each year both India and China (and Russia too) are on that list, usually made up of about ten countries. And when it comes to handling commercial disputes, China consistently does quite well in the World Bank ratings (top 20), whereas India is always very near the bottom. Now I am not saying that these statistics mean that China is safer than India for outsourcing (especially since I am of the view that in the end the best analysis is by company, not by country), but I am saying that the fears regarding China are exagerated, at least as compared to India.

Of course, for all I know, the poll results for India would have been similar, but I do not think so.

What do you think? Would you outsource your IT to China? Are you already outsourcing IT to China? Are you any more or less willing to outsource your IT to China than to India?


Dan Harris is founder of the Harris & Moure law firm, a boutique international law firm focusing on small and medium sized businesses that operate internationally. China is the fastest growing area for the firm. Dan writes ChinaLawBlog.com as a source of China legal and business information.

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