Chinese outsourcer Neusoft opened a software delivery center in the northeastern city of Dalian Wednesday, with capacity for up to 10,000 engineers.
The center is the second for Neusoft in Dalian, one of China's 10 national software bases, and is aimed at serving the Japanese market. Neusoft Park, within the Dalian High-tech Industrial Zone, will also house three new business units for the company, in telecom, power and finance.
China has become an increasingly popular destination for software and BPO (business process outsourcing), with costs rising in India and demand for qualified engineers outstripping supply.
Last year, IDC predicted that government investment in the outsourcing industry would help China overtake India as the world's leading outsourcing destination in 2011, according to its Global Delivery Index. Also in 2007, an Electronic Data Systems white paper estimated that the Chinese outsourcing market could be worth US$56 billion by 2010 and employ 4 million people.
"China has the talent pool and the cost structure, and it is the market people are chasing," said Cyrill Eltschinger, CEO of Softtek China and author of "Source Code China," a book about China's outsourcing industry. Eltschinger believes in the outsourcing motto of "country before company" -- choosing partners based in markets where they are or plan to do business.