Premier: China's outsourcing industry must expand

Premier Wen Jiabao has urged a further expansion of China's outsourcing industry and encouraged more private investment in the sector.

In a speech, the premier said China would continue to promote the industry extensively, and invest in skills training, especially in key sectors which would be vital in attracting overseas direct investment into China.

He added that China would also continue promoting the export of those service skills in key sectors overseas.

During China's 11th Five-Year Plan (2006-10), the country's financial services, retail, hotel, transport, tourism, logistic, culture, animation, e-commerce and other emerging services industries and new format industries grew rapidly.

The service sector is reported to have created 5.79 million jobs each year, and provided 34.6 percent of all new jobs.

Speaking at the inauguration of the 4th China Sourcing Summit, Wang Chao, vice-minister of commerce, emphasized the importance of the country's outsourcing sector, and its benefits to the Chinese economy.

He said that it currently makes a significant contribution to the economy, and that the government will continue to support a number of leading enterprises involved in the sector, especially in their efforts to attract overseas business.

"The Chinese government certainly encourages leading service enterprises to compete overseas, and will ensure a secure environment for intellectual property and information protection here," he said.

He added, to help boost the industry, the government has promoted a number of initiatives, including offering tax incentives and improving related training programs for outsourcing companies, while identifying 21 cities as outsourcing 'models'.

In 2011, the contract value of China's service industry was $32.39 billion, up 63.4 percent from the year of 2010, according to the Commerce Ministry.

The latest figures showed that from January to August, Chinese enterprises completed contracts worth $26.9 billion, up 54.7 percent year-on-year. Those contracts worth $18.7 billion were from overseas, up 48.4 percent year-on-year.

"Service outsourcing contributes to the shift in China's economic growth model and the upgrading of China's foreign trade in an innovation-led economy," Wang added.

The rapid growth in exports of service skills has also made up for the slowing growth in manufacturing, he said.

Industry figures show that in 2011, the growth rate of China's service outsourcing was 40.1 percentage points higher than that of goods exported, which saw a year-on-year growth of 7.8 percent in the same period.

zhengyangpeng@chinadaily.com.cn