Asian offshoring gains strength

China and Singapore emerge as latest challengers to India's dominance in IT offshoring

China and Singapore are emerging as the latest challengers to India’s dominance in the IT offshoring sector. Services giant EDS has announced plans to expand its presence in China, and Singapore is offering tax breaks for IT investment.

EDS is looking to build up its existing operations in Beijing, Chengdu, Guangzhou, Hong Kong and Shanghai, in a bid to attract more business from Chinese companies and multinationals operating in the country.

An EDS spokeswoman added that its Chinese sites were also providing offshore services to clients in the West as part of its “best-shoring” global service delivery model.

IT services provider Cognizant also plans to extend its operations in China. “We’re looking to grow our 100-strong development centre just outside Shanghai and we’re very optimistic that the skills, level of government backing and protection for intellectual property in the country are improving,” said Sanjiv Gossain, UK vice-president at Cognizant.

Meanwhile, Singapore is promoting its own IT offshore facilities to compete with China and India. The Singapore Economic Development Board (EDB) is currently offering tax breaks and other financial incentives to IT firms setting up in the country.

Speaking at last week’s CommunicAsia show in Singapore, Simon Lim, a deputy director at the EDB, emphasised the country’s advanced communications and travel infrastructure, along with its central position in South-East Asia as key to recruiting highly-qualified technical staff. Lucasfilm, Sybase and Motorola all currently have facilities in Singapore.

“Singapore has a great airport, great local talent and support from the government,” said Jay Anderson of Motorola Asia Networks. “It is cheaper for us to build and distribute handsets from here than it would be in either Europe or China.”