Process in place

"Overall, China is at least seven years ahead of India. The Chinese society is more organized and has better infrastructure. The legislations in China are clear and easier to understand. In India, by contrast, different provinces have different tax regulations, making it difficult to operate," says Niemi.

On April 6, 2010, the State Council unveiled a policy that is dubbed as "the 9th document." The policy focuses on importance of foreign capital investment in high-technology and knowledge-intensive industries. It is considered by many as a milestone document in China's shift towards a 'sustainable growth.'

In August last year, China's Ministry of Finance and the Ministry of Commerce, came out with what is the best news for the industry till date.

The ministry announced a business tax exemption for the turnover realized from offshore outsourcing services, including ITO, BPO and knowledge process outsourcing (KPO) for companies registered in the 21 test cities between July 1, 2010 to Dec 31, 2013. Additionally the companies were also given a reimbursement allowance of 4,500 yuan for each worker trained by them.

New amendments within the framework of the WTO was made to the Law of Intellectual Property Rights in 2008 and that to the Patent Law in 2009, as an effort to disperse fears that piracy of intellectual property will constrain economic growth in China.

Industry circles are of the view that Chinese employees not only have sound basic computing and mathematics skills, but also are also ready to undertake complex and tedious BPO services like data entry.

Yet another attraction for the BPO industry is the competitive wage system in China. An entry-level BPO staffer in China is paid around 3,000 yuan a month. India, in contrast, is getting more and more expensive, according to SAP, one of the world's biggest software companies.

"I strongly believe the outsourcing winds will continue to blow strong in China," says Liu.