Outsourced services post healthy Jan-Sept

The double-digit growth in China's services outsourcing sector in the first three quarters suggests the country will continue to play an active role in global economic cooperation and create more opportunities for companies to expand their business activity in the sector, experts said.

The remarks came after data from the Ministry of Commerce on Wednesday showed that Chinese enterprises were involved in services outsourcing business with a contract value totaling $212.4 billion and execution value reaching $145.6 billion in the first three quarters, up 15.8 percent and 15.3 percent year-on-year, respectively.

"The increase in the total value of services outsourcing in the January-September period showed that China is still playing a very active role in participating in global economic cooperation, of which service-oriented business is an important feature," said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

"More importantly, the growth of services outsourcing suggests large potential for companies to expand their market in the field," Zhou said.

The growing sector has created new job opportunities for about 630,000 people in the first three quarters, the ministry said.

Contract value of offshore services outsourcing business during the period hit $120.7 billion, and execution value reached $84.7 billion, up 15.2 percent and 12.3 percent year-on-year, respectively.

"The growth rate of offshore services outsourcing business was lower than the overall growth rate, suggesting that the sector developed faster in the domestic market and demand for services outsourcing at home is increasing. The situation plays an active role in improving the quality of China's economic development," Zhou said.

Zhou added that currently the development of services outsourcing in sectors like finance and biotechnology relies heavily on technical innovation, which will also promote development of relevant industries. In addition, the development of services outsourcing — unlike trade in goods — is intangible and relies more on trustworthiness, which helps improve the social credit system.

"The latest data show that businesses with higher requirements for technical innovation, such as new energy and information technology, are new highlights of services outsourcing development, attracting the attention of enterprises and reflecting the direction of market development," he said.

The ministry said businesses engaged in services outsourcing related to new energy technology research and development, information technology as well as internet marketing and promotion grew faster than other sectors, up 160 percent, 128.5 percent and 58.9 percent year-on-year, respectively.

Data also showed that Chinese companies were involved in 132.6 billion yuan ($18.5 billion) of offshore services outsourced from member countries of the Regional Comprehensive Economic Partnership in terms of execution value, up 8.2 percent year-on-year and accounting for 24.1 percent of the total.

Among them, the execution value of offshore services outsourced from New Zealand, Indonesia and Singapore grew by 102 percent, 59.6 percent and 31.6 percent, respectively, which were faster compared with other countries.

The ministry said private enterprises were involved in 168.4 billion yuan in offshore services outsourcing, accounting for 30.6 percent of the total, up 27.3 percent year-on-year and 17.6 percentage points higher than the overall average growth rate.