MOFCOM Department of Trade in Services and Commercial Services Comments on Service Outsourcing Development Situation in the First Quarter of 2017

On July 27, the Head of MOFCOM Departmentof Trade in Services and Commercial Services made a statement on the serviceoutsourcing development situation in the first half of 2017.

In the first half of 2017, the executedvalue of service outsourcing completed by Chinese enterprises reached 345.07billion yuan, with an increase of 13.8% year on year. Among these, the executedvalue of offshore service outsourcing reached 218.36 billion yuan, with anincrease of 12.2% year on year. In June, the executed value of offshore serviceoutsourcing was 57.95 billion yuan, with an increase of 22% year on year.

The Head of MOFCOM Department of Trade inServices and Commercial Services pointed out that Chinese service outsourcingin the first half mainly showed the following features:

The business structure was constantlyoptimized and the proportion of high value-added business was improved. Theexecuted value of ITO, KPO and BPO was 102.95 billion yuan, 82.03 billion yuanand 33.38 billion yuan, with an increase of 11%, 17.1% and 5.1% respectivelyyear on year. The total proportion of KPO and BPO reached 53%. The exportgrowth of the outsourcing of key industries such as telecommunication,computers and information service reached more than 15%.

The American and European marketdevelopment was smooth and the market of the Belt and Road enjoyed a rapiddevelopment. The executed value of service outsourcing undertaken by China fromthe United States and the EU was 50.32 billion yuan and 33.28 billion yuan,accounting for 23% and 15.2% of the total executed value. The executed value ofoutsourcing undertaken from the countries along the line of the Belt and Roadwas 39.53 billion yuan, with an increase of 33.6% year on year. Among these,the executed value of outsourcing undertaken from 11 Southeastern countries was23.24 billion yuan, accounting for 60% of the countries along the line of theBelt and Road.

The accumulative effect of demonstrationcities was obvious and the regional growth of non-demonstration cities wasfast. 31 service outsourcing demonstration cities completed the offshoreservice outsourcing of 200.9 billion yuan, with an increase of 9.8% year onyear, accounting for 92% of the national total. The executed value of offshoreservice outsourcing completed by non-demonstration cities reached 17.4 billionyuan, with an increase of 50.4% year on year.

With modern information technologypermeating into all industries, the trend of the manufacturing industry’sservitization, the outsourcing of the service industry and digitalization, theintegration and high-end orientation of outsourcing was increasingly obvious.At present, 70% of China’s emerging service export depends on offshore serviceoutsourcing and service outsourcing has become an important way for Chineseindustry to integrate into the middle and high end of global value chain. Inthe second half of this year, MOFCOM will study the opinions and formulaterules to promote the transformation and upgrading of service outsourcing, pushforward the preferential policies of demonstration cities to spread tonon-demonstration cities, set up a dynamic regulation mechanism fordemonstration cities to go in and come out and constantly optimize serviceoutsourcing industry and regional distribution.