Outsourcing: China takes the lead over India

According to a recent study by KPMG, China would have replaced India as the first destination of outsourcing and shared services for companies in Asia pacific. Singapore would be second.

Although the survey was restricted to asian companies, the trend is clearly: China is the number 1 choice for Asian companies to outsource services.

42% of respondents say their company has set up one of their shared services center in China and 41% say they have an outsourcing provider There.

Singapore is quoted as second preferred outsourcing location (29%), ahead of India (25%).

The survey shows low labor costs are one major reason for companies to outsource or organize a shared services center in China. But other reasons are also emphasized such as supply of skilled talent, language skills and infrastructure. Such arguments haven't so far convinced western companies as well, but the situation could evolve on the midium term.