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China to boost outsourcing industry

Updated: Jan 17,2015 5:20 PM

The State Council issued a circular on Jan 16, asking authorities to take a number of steps to boost the outsourcing sector as it seeks to upgrade it to play a greater global role by 2020.

In the next three years, the country should nurture high-end and international expertise in the industry, and set up a number of internationally competitive outsourcing companies, according to the circular.

It should attract more graduates in the same timeframe, and more outsourcing services of a higher quality should be provided.

The government also wants lists of industries that could make better use of outsourcing.

Software, information technology, design, research and development, the Internet, medicine and energy are sectors that could benefit, it said. The development of outsourcing business in other fields, such as culture, education, logistics and entertainment, should also speed up and financial institutions should contract their non-core services to professional companies.

Overseas markets, including developed countries and countries along the Silk Road Economic Belt and the 21st Century Maritime Silk Road should also be explored. World-leading outsourcing platforms will be established in the Yangtze and Pearl river deltas, the region surrounding the Bohai Sea, as well as Beijing, Tianjin and Hebei by attracting domestic and overseas resources.

Central and western regions should also develop the outsourcing industry, build an open economy, and take on more industries from eastern regions and from other countries.

Northeast China, the country’s traditional industrial base, should take advantage of its industrial setup to develop the outsourcing industry, thus help revitalize the economy in the region. The circular said that it supports various kinds of companies, whether State-owned or not, to take on outsourcing businesses and encourages companies doing outsourcing businesses to develop their own specialties and brands, and improve their R&D capacity.

Companies are encouraged to outsource their non-core businesses, and governmental departments should outsource more businesses and purchase more services. Colleges and universities should introduce courses that focus on the industry, and cooperate with outsourcing companies to nurture more professionals.

The government also decided to formulate the 13th Five-Year Plan to develop China’s international outsourcing industry.

Companies doing outsourcing businesses are encouraged to take part in international expos, and offer services overseas that have high added value, such as R&D.

Companies and institutions are also encouraged to purchase high-end outsourcing services from abroad, and introduce advanced technology and managerial skills.

The government asked authorities to provide more fiscal support and offer tax-reduction policies to more outsourcing companies.

Outsourcing service demonstration cities will be increased from 21 to 31. The country should implement zero value added tax rate and tax exemption policies on international outsourcing businesses. Financial institutions should also offer more support to companies in the industry.

A sound legal system to boost and regulate the development of the outsourcing businesses will be established, so that people in the industry will be held accountable for illegal acts , such as leaking national secrets and fraud.