Outsourcing Takes a Different Course

By LIU QIONG

The China Service Outsourcing Research Center is inaugurated in Pudong on April 23, 2008. Cnsphoto

AS tens of millions of viewers around the world are fascinated by the Oscar-winning film Avatar, few know that the occult extrasolar planet Pandora, including its blue-skinned feline-featured Navi residents, both bear made-in-China tags.

Since Lord of Rings was released nine years ago a raft of American blockbusters have had their fictional figures and rigs made from drawings and models fashioned in Chinese studios. It is now standard practice in Hollywood: script written in the U.S., prototype built in China, recording done in New Zealand and music composed in France. When all the components are assembled at the end of the process, a Hollywood movie is born.

Creators of screen heroes like Spiderman and King Kong, Chinese filmmakers nevertheless remain on the fringe of this international collaboration, shunned by the core drivers of creativity and state-of-art technologies that provide real access to the gold mine. This reminds many of China’s position in the world’s manufacturing structure, where it has long rested on the bottom, handyman rung. As service outsourcing swells in many industries, China is becoming more cautious about repeating the course of its manufacturing sector, and is fixing its sights on the upper reaches of the outsourcing businesses that are tied to higher-value returns. It might give India a run for its money, if trends continue.

Knowledge Outweighs Techniques

Everyone knows IBM is a computer company, but few are aware it is offering consultation to a Guangdong-based Chinese bank on issues like in which cities to establish branches, and of what size. From electronic appliances to services, and then to ideas, IBM has steered a transition in its business model from hardware to software to consulting, and is sustaining its dynamics en route. Its evolution is inspiring to outsourcing service providers in China.