Outsourcing to China

Multiple countries in Asia are joining the outsourcing revolution, with governmental and industrial groups deciding on specific niches to pursue. The goal is specialization and domination.

For example, India dominates the software, back office and services industries. Policies in support of outsourcing go back well over a decade in India. In the same way, China has dominated production and manufacturing niches and is seeking to extend its reach.

Expansion of Chinese Outsorucing

Obviously, many multinational companies have manufacturing units in China. Chinese outsourcing companies have the deep expertise and experience churning out products that meet international standards. The vast and cheap chinese labor pool being a major factor.

However, a growing number of software companies also use Chinese resources to make OEM versions of their software applications. The expansion of Chinese software outsourcing is leading to inroads in other areas. For instance, China industry is expanding to fill the growing virtual assistant market.

The outsourcing of software and other business processes is quite different from the process of outsourcing product creation. Historically, China has had a rather spotty record in dealing with trademark and intellectual property. Whether this will change in the future is a matter of debate. Regardless, companies looking to outsourcing their production to China must have a strong knowledge of intellectual property rights. Companies need to register, trademark and get the copyrights they require before outsourcing is carried out. A strong understanding of Chinese law is required as well as assessment of potential downsides and security risks