China has the potential not only to pull in a huge amount of outsourcing revenue from the United States but can also offer opportunities for US outsourcing service providers, say industrial executives.

During the first China US Outsourcing Business Development Summit at the weekend, Michael F. Corbett, president and chief executive officer of a US outsourcing research company, said: "Outsourcing is still in its infancy stage and we believe you (Chinese people) have tremendous opportunities to help shape that future."

He said although China is already a big recipient of manufacturing outsourcing orders from US companies, it still has good prospects for moving further up the value chain by getting involved in more advanced areas.

While many US companies still give most of their software outsourcing projects to Indian firms and ignore Chinese businesses due to language and legal barriers, they are starting to pay more attention to China.

"Considering the two challenges Chinese companies face, my initial impression is that they can start (off in) some technical areas, which have common industrial language," said Corbett.

Corbett said he believes Chinese companies have a lot of room to develop their scope for industrial design and engineering, as well as information technology (IT) service outsourcing.

Rao Vellanki, offshore operations director of the US home appliance retailing giant Best Buy Inc, said although his company has more than 500 people working in India to develop internal information infrastructure, Best Buy is interested in co-operating with Chinese IT service providers.

He has already made arrangements with some leading software firms in China including Shenyang-based Neusoft - one of the biggest software exporters in China.

Walter Fang, chief technology officer of Neusoft, said he anticipates that the interest from US companies will create another huge market.

"Most of our outsourcing projects come from Japan, but I believe the United States will be a bigger market for us in the future."

However, China will not simply receive outsourcing orders from the United States, as it also has potential to offer such contracts to US firms.

William Poon, Chinese general manager of the Managed Services Department for the US-based Hewlett Packard Services, said while his company had only worked on projects from multinational firms in the past, he has been talking with several domestic companies about outsourcing their IT services. Some agreements could be announced in two or three months.

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