The Development of Outsourcing Service
in Guangdong Province
I.
Brief introduction of the development of outsourcing service in
Guangdong Province
According to the outsourcing business management and statistical
systems of Ministry of Commerce, as of July 2010, Guangdong Province
registered service outsourcing enterprises total 744, number of employees
250,700, then the value of the signed contract $4.52 billion., then package
execution of the contract valued $3,004 million , 475 Service outsourcing
enterprises have obtained international certification. Among them,
Guangzhou and Shenzhen chosen as demonstration cities of outsourcing
service have respectively 374 & 287 outsourcing enterprises , accounted
for 50.27% and 38.58% in the province.
From January to July of 2010, there are 216 newly registered
outsourcing service enterprises in Guangdong Province, with the number
of newly recruited employees 837 people, then the signed contract valued
of 1.27 billion U.S. dollars, an increase of 72.80%; the implementation of
contracts valued of 887 million U.S. dollars, an increase of
77.75%, number of newly certified enterprises increased to 181. Among
them, Guangzhou, Shenzhen City, added 168 & 25 outsourcing service
enterprises respectively.
II.
The main measure of encouraging the development of outsourcing
service in China and Guangdong Province,
1. The country has set up business development capital to support
the development of conducting offshore international services
outsourcing businesses, to provide financial support to those qualified
outsourcing enterprises. Main contents are as follow: the outsourcing
enterprises will receive government fund as training fees with a fixed
amount of no more than 4500 for each newly hired working staff who
gets a University (including college) education background or above and
signed a year (including 1 year, the same below) or more "labor contract",
engaged in service outsourcing and the said amount of money should
only be spent for training. support for a fixed element (targeted for the
training of personnel); The service outsourcing trainees who get a
university (college education) educational background and trained and
passed the examinations in the fields of service outsourcing business
knowledge and skills assessment held by the outsourcing service training
institutions, who sign 1 year or more labor contract with the service
outsourcing enterprises , the said training institutions will receive no
more than 500 yuan per person as fixed training fees support. The service
outsourcing enterprises which obtained the following certifications such
as the Capability Maturity Model Integration (CMMI), developed the
Capability Maturity Model (CMM), the maturity of human resources
Model (PCMM), Information Security Management (IS027001/BS7799),
IT Service Management (IS020000), service providers, environmental
safety (SAS70), the International Assessment and Accreditation of
Laboratory Animal Board Certification (AAALAC), Good Laboratory
Practice (GLP) Information Technology Infrastructure Library
certification (ITIL), Customer Service Centre Certification (COPC), for
Worldwide Interbank Financial Telecommunication Certification
(SWIFT) and other related series of certification and certification of
maintenance, upgrade support, each firm can apply for up to 3 items per
year for certification program and each project will be given no more than
500,000 yuan as financial support.
2. Tax breaks will be given to enterprises recognized as the
advanced technology service company. The main contents include:
accredited advanced technology service business will pay 15% corporate
income tax;. Of accredited advanced technology service enterprise,
employee educational expenses of its occurrence by no more than 8% of
the total wages paid by enterprises, according to the proportion of
enterprise income tax deduction is more than part of the allowed
deduction in future tax years; advanced technology enterprises shall be
exempt from business tax for their incomes from their offshore
outsourcing service businesses.
3. For the outsourcing enterprises meeting the conditions concerned,
may practice flexible and special working hours system. For
technological advanced outsourcing enterprises which meet the
conditions of labor and employment and management and could not
implement the standard working-hour system due to their special
production characteristics, may practice a flexible and special working
hour only with the approval of the provincial Human Resources and
Social Protection (labor and social security). Upon approval, flexible
and special working hours system may apply to those jobs such as
software designers, R & D personnel, senior management and other jobs
which can not be measured with the standard working hours or workers
must conduct mobile operations after the approval; Flexible and special
working hours system may also apply to those staffs with special working
characteristics for continuous work or for those implementing
comprehensive timing working-hour mechanism.
4. Guangdong Province is to promulgate in the near future " The
opinions and decisions on the development of service outsourcing
business in Guangdong Province" and the provincial financial department
will allocate supporting fund of about 20 million yuan to support the
development of outsourcing business.
5.Certain convenience to facilitate approval and registration will be
offered for enterprises engaged in outsourcing service business in their
access to approval and business registration. There will be no market
access restriction for enterprises engaged in offshore outsourcing
information technology businesses (do not provide services to domestic
customers), and regarded as a non- value-added telecom services, such as
tele-support, network business processing, call centers, data processing
and other information technology-based offshore service.
III. The priority of the development of outsourcing service business
over the next 5 years in Guangdong Province.
The development priorities: to rely on software outsourcing, financial
services outsourcing, take manufacturing production as the main engine
and features, to take R & D and other knowledge process outsourcing as
the breakthrough, cultivate service outsourcing enterprises with advanced
technology, promote the development of high-end outsourcing industry,
in-depth interaction with advanced manufacturing technology.
1, the dominant industries beginning to take shape: the outsourcing of
the development and testing outsourcing businesses for the Embedded
software and application software. Finance, insurance, accounting and
other data-processing outsourcing business.
2. the potential leading industries: R & D services outsourcing
business, animation and film outsourcing, Medical care services
outsourcing business.
3, industrial linkage of the core industries and manufacturing:
logistics outsourcing business, human resource management outsourcing
business, procurement and marketing services outsourcing business, fair
and exhibition services outsourcing business.
4, the essential basic industries
Customer service call center. International Data Backup Center.
IV. Focus on the development of outsourcing for different cities.
1, Guangzhou City
Relying on Guangzhou’s urban planning and the industrial layout,
build the pattern of "one core zone and five radiation function zone"
service outsourcing space layout framework.
One core zone: the core clustering area of service outsourcing. Greater
Pearl River New City Central Business District and the traditional city,
Tianhe New CBD area, consisting of new central clustering area of
service outsourcing core group, the headquarters for the international
service outsourcing base to form the International access package, the
developer gathering centers and elements of the spread of outsourcing
hub, focusing on the development of financial services outsourcing,
outsourcing and intellectual property services business services
outsourcing.
Five radiation function zone: five directional characteristics of the
development of service outsourcing. Which includes the Tianhe Software
Park, Guangzhou Science City, Whampoa International Animation City,
the National Park and other online games and cartoon industry base,
including Zengcheng-direction, Nansha Development Zone-direction
including Hoi Chu Science Park , Guangzhou International Biological
Island, Hoi Chu Science Park , Guangzhou University City, Guangzhou
Metro, Panyu Energy Saving Technology Garden, Panyu digital home
demonstration industrial base, Tsinghua Science Park Innovation Base in
Guangzhou, Nansha Town, Nansha port logistics industry base, New
Passenger Station direction, including flowers in New City, Guangzhou
Design Hong Kong, Guangzhou Creative Industrial Park etc, Huadu
direction including the Baiyun New Town, Baiyun Technology Park,
Huadu Airport Logistics Park etc, Conghua direction relying on the
Conghua animation industry park.
2, Shenzhen City
Based on the present development of basic and relevant planning
guidelines, "one axis, two development belts, multi-base" of service
outsourcing industrial pattern will be created as a whole layout.
One axis: that is something of a spindle to the development of service
outsourcing including the "airport - Yantian" service outsourcing
development themes
Two development belt： that is the development of service outsourcing in
the north-south zone, one is "Shekou - Guangming" the western
outsourcing service development belt, the other is "Lo - Pinghu"
Outsourcing service development belt.
the eastern new high-tech zone and the major urban district of Xianzhou
development zone: Lo - Phuket - Pinghu.
Multi-bases, namely, the development of multiple professional services
Outsourcing Park or base such as the Shenzhen Software Park, Ma
Jialong service outsourcing demonstration base, Shiyan IT outsourcing
base, the Shenzhen financial industry database service base
and
the Qianhai logistics park etc.
3, Zhuhai City
"two belts and five districts," the development pattern of service
outsourcing industry.
"Two-belt" means the eastern new high-tech zone and the major urban
district of Xianzhou development zone, the western Gaolan Port
Economic Zone and the Air Industrial Park.
"Five Districts" means regarding high-tech zones as the main carrier of
outsourcing industry clustering with the information technology and
cultural and creative outsourcing services. regarding Jida and Hengqin
as the carrier areas for new financial outsourcing services; regarding Jida
as the main carrier of purchasing and consulting services; regarding
Gaolan Port Economic Zone and the Air Industrial Park as the main
carrier of modern logistics outsourcing and facilities management
services concentrated areas.
4, Foshan City
Follow the layout of the existing industrial base, and focus on developing
the "three areas three bases." That is to put Chancheng, Nanhai, Shunde,
as the core areas of outsourcing development.
To develop the significant financial database for operations and
outsourcing bases by relying on Guangdong financial new-high-tech
district as the carrier in building the regional financial cooperation,
innovative pilot base for Guangdong, Hong Kong and Macao.
To develop the software and information services outsourcing industry
base by based on Guangdong flat-panel display Industrial Technology
Research Institute and Guangdong (Nan Hai) digital platform for the
creative industries such as public service innovation platform for the
Pearl River Delta information industry service platform and the Chinese
model city of service outsourcing base.
To develop the creative industrial design base by relying on the
Guangdong Inustrial Design City, the National Industrial Design and
Creative Industry (Shunde) Base, Foshan Creative Industrial Park,
Guangdong (Foshan) Software Industry Park, Shek Wan Ceramics
Cultural Creative Industrial Park as the industrial cluster of the Pan-Pearl
River Delta areas.
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China Sourcing, Guangzhou Leading
Guide to Investment in Guangzhou
Guangzhou，also known as ”Canton”, has been designated as China
Service Outsourcing Demonstration City, the State Software Industry Base
and National Software Export Base. Well-known across the globe for
processing trade, Guangzhou, the largest city in southern China, has made
its strategic decision to rapidly develop the service outsourcing
industry as a result of the shift from manufacturing to service economy.
In 2009, Guangzhou witnessed its software industry output exceeding
USD 8 billion. According to the developing plan, by 2015, the revenue of
outsourcing in Guangzhou will exceed USD 180 billion, and the number of
outsourcing enterprises will reach 2000, with about 280,000 strong
workforce.
Currently, services outsourcing in Guangzhou is focusing on software
developing, Biomedical R&D, modern logistics service, and Animation,
Comics and Games. Major development will be put on such sectors as
financial, industrial designing, tourism, conference and expo,
commercial service, intellectual property and Cloud service.
Guangzhou, the Gateway to the Asia-Pacific Region
Guangzhou, located at a strategic area surrounded by Singapore, Hong
Kong, Macau, Taiwan and inland cities of China, is one of the most
competitive and dynamic cities in China. It is known as the “Southern
Gateway” of the Chinese economy.
More than 170 “Fortune 500” companies have settled in Guangzhou.
Many famous international companies have established their headquarters
or administrative offices in Guangzhou. 23 “Global Outsourcing 100”
companies have set up service networks in Guangzhou. Many foreign
companies have established their key production or R&D centers here,
including Accenture、IBM、Sodexo、CB Richard Ellis、Capgemini、Neusoft、
VanceInfo、NCS.
Guangzhou, Your Best Choice for Service Outsourcing
The “City of Business” – Established in 214 B.C., Guangzhou is a
famous cultural city with a long history. It was the starting point of
the “Maritime Silk Road” after the Han and Tang dynasties. The world
famous “Canton Fair” has been successfully held for over 100 times.
A Transportation Hub – Bordering Hong Kong, Macau, Taiwan and
Singapore, Guangzhou, China’s “Southern Gateway” to Asia and North
America, enjoys convenient air and sea transportation conditions.
Business Environment – Guangzhou is one of the leading cities for
development of outsourcing business in China. Government support and
treasury funds have sharpened the competitive edge of Guangzhou’s
outsourcing industry.
Human Resources – Guangzhou enjoys a large reserve of well-educated
professionals of various disciplines. The Guangzhou Higher Education Mega
Center is a national first-class university park with integrated
functions of education, R&D and production. It is the educational,
research and exchange center in South China.
Knowledge Innovation – The Guangzhou “Knowledge Hub” is a joint
venture between Guangzhou and Singapore. It will provide a new engine for
the development of high-end knowledge industries in China.
Living Conditions – The living standards in Guangzhou lead the nation.
The government is dedicated to providing high-quality education, medical
care and other social services.
1.About Guangzhou
Guangzhou, the capital of Guangdong Province, is one of the five
National Central Cities in the Mainland of China along with Beijing,
Shanghai, Tianjin and Chongqing, and the political, economic,
technological, educational and cultural center in South China. Adjacent
to Hong Kong and Macau, Guangzhou enjoys a unique geographic advantage
in both domestic and international trade.
Being a member of the World Association of the Major Metropolises,
Guangzhou aims to become an international financial, commercial, trade
and information center, a tourist resort, and a transportation and
communication hub, with a beautiful environment, complete facilities and
reasonable industrial layout.
Guangzhou is a famous cultural city with a history of over 2,200 years.
Early in the Qin and Han dynasties, it became a busy port. Later, in
the Han and Tang times, the “Maritime Silk Road” was developed and
Guangzhou became the starting point. It is one of the earliest ports in
China open to foreign merchants. International exchanges left numerous
cultural and historic relics.
Guangzhou has a subtropical monsoon climate. The annual average
temperature is 20-22℃. There are green trees and flowers throughout the
year, hence the name “City of Flowers”. Guangzhou has over 10 districts
and 2 county-level cities in its jurisdiction with an area of 7434.4 km2.
At the end of 2009, the city had a permanent population of 10,334,500.
Guangzhou is an excellent place for both living and business
development. In 2002, it received the “Dubai Award” from the United
Nations for its efforts to improve the living environment. It also
received many honors, such as “National Model City for Environmental
Protection”, “National Model City for Forestation”, “National
Advanced City for Civilization Construction”, “International Garden
City”, and “Best Chinese City Favored by European Tourists”.
On November 12, 2010, the 16th Asian Games has been held in Guangzhou.
It is the second Chinese city to host this event after Beijing.
2.Business Environment
“Competitive, Flexible, Comprehensive and High-end”
Economic development
In 2009, Guangzhou’s GDP reached 911.28 billion RMB, increasing
11.5% over the previous year. Its per capita GDP exceeded 10,000 US dollars,
ranking third among Chinese cities and ranking 30th in the world.
Automobile, petrochemical and electronic information are its three pillar
industries. Bio-pharmaceutical, high-tech and modern service industries
are developing rapidly. A modern industrial system with complete
industries, excellent infrastructure facilities and strong R&D abilities
has taken shape. Guangzhou’s consumption market and consumption scale
hold an important position in China, and bear a direct impact on the
development trend in the Pearl River Delta area.
In 2009, Guangzhou attracted a total of 844 projects with foreign
direct investments from 56 countries and regions. By the end of 2009, a
total of 170 “Fortune 500” companies had settled in Guangzhou. They
established 394 projects with a total investment of 16.16 billion US
dollars. Many famous multinational companies such as P&G, Amway, FedEx,
and HSBC have established their headquarters in Guangzhou.
In 2010, Guangzhou was rewarded the best city on the Forbes List of
Best Business Cities in China, honored as “2010 China International
City”.
On the record of Guangzhou Municipal Administration of Industry and
Commerce, there were a total of 9,250 foreign-invested enterprises, 5,916
branch offices (non-corporation) of foreign-invested enterprises, and
4,019 representative offices of foreign enterprises and enterprises from
Hong Kong, Macau and Taiwan.
There were over 2,300 financial institutions with financial assets
exceeding 100 billion RMB.
In 2009, the value increase of the tertiary industry was 554.556
billion RMB, increasing by 13.6% over the previous year. The total foreign
trade volume was 76.737 billion US dollars. Of this total, 37.405 billion
US dollars came from export and 39.332 billion US dollars from import.
Source: Chinese Outsourcing Plan; Guangzhou Foreign Trade Report 2010;
Guangzhou Economic and Social Development Statistic Bulletin 2009.
Preferential Policies
All offshore outsourcing businesses are exempted from business tax
in Guangzhou.
For Technology Advanced Service Enterprises, corporate income tax
(CIT) will be levied at the reduced rate of 15%. The staff training
expenses will be deducted from the pretax CIT if they are within 8% of
the payroll. Such enterprises will enjoy favorable tax rates for import
of equipment as in bonded areas.
(Technology Advanced Service Enterprises refer to technical service
enterprises in the category of ITO, BPO and KPO, with at least half of
the employees having college diplomas and strong R&D ability, and the
gross business revenue within the specified scope account for at least
50% of the total revenue of the year.)
Outsourcing enterprises will be given financial support for
acquisitions of international certificates such as CMM and CMMI, and for
the subsequent maintenance and upgrading of the certificates.
Outsourcing enterprises will enjoy training subsidies for newly
employed college students.
Source: chinasourcing.mofcom.gov.cn; Document GBH [2010] No. 69.
Workforce
Guangzhou enjoys rich human resources which can meet the requirements
of various enterprises. Guangzhou has a complete educational system with
a large team of teaching staffs and diversified teaching programs. There
are 76 universities and colleges, including the famous Sun Yat-sen
University, South China University of Technology, Jinan University, and
Guangdong University of Foreign Studies, with a student population of
800,000, including about 20,000 foreign students, and 196 independent R&D
institutions. They have established cooperative relationships with over
200 research institutions, universities and academic organizations in
over 20 countries and regions.
Guangzhou has a stock of nearly 1,900,000 talented professionals,
including academicians, doctors, masters and bachelors, as well as
experienced and skilled workers. Besides, more and more talented
professionals are attracted to Guangzhou each year by its fast development,
good prospects and excellent business environment. They can meet the
requirements of different enterprises. According to statistics,
approximately 300,000 persons are introduced through the Nanfang Job
Center each year.
Source: Guangzhou Economic and Social Development Statistic Bulletin 2009;
Foreign Trade Report 2010.
Source: http://chinasourcing.mofcom.gov.cn/gz/gz1citymiennr1.html
3.Regional Gateway
Guangzhou, the “Southern Gateway” of China, enjoys an advantageous
location as well as a convenient transportation network. Whatever you do
and wherever you go, you will enjoy cost-effective service in Guangzhou
through its developed transportation and telecommunication systems.
Transportation Network
The New Baiyun International Airport is one of the three largest
airports in China and the 30th largest airport for passenger transport
in the world. It takes only 3-4 hours from Guangzhou to Japan, Singapore,
Malaysia, South Korea or Taiwan. There are nonstop flights to Manila, New
York, Tokyo, Osaka, Bangkok, Singapore, Sydney, Melbourne, Los Angles,
Paris, and other international cities.
Guangzhou is a key transportation hub in the Pearl River Delta area,
with perfect infrastructure facilities and convenient transportation
links. Centering round the construction of Asian Games facilities, the
city will spare no effort to speed up the construction of key
infrastructure projects. In November 2010，when the Asian Games is held,
Guangzhou will have a modern transportation network featuring three ports
(airport, seaport and information port) and two expressways (motorway and
rapid transit railway).
Guangzhou Port is an important comprehensive port in South China. It
is also an important container port and the largest trade port in the
region, with routes to over 300 ports in over 80 countries and regions.
Guangzhou has developed subway lines. By the end of 2010, there will
be 8 subway lines with a total operating mileage of 222 kilometers.
Guangzhou East Railway Station is 183 kilometers or one hour and 40
minutes’ ride from the Hung Hom Station in Kowloon, Hong Kong. There are
12 trains from Guangzhou to Hung Hom every day.
Source:
Source:
Source:
Source:
http://www.baiyunairport.com/about.jsp
http://chinasourcing.mofcom.gov.cn/gz/gz1citymiennr1.html
http://www.gzport.com/html/gkgk.asp
Guangzhou Economic and Social Development Statistic Bulletin 2009
Communication Network
Guangzhou has a leading information system. Now, efforts are being
focused on the building of a national model city for information system
development. As one of China’s three largest information centers and one
of the three major Internet portals, Guangzhou has an export bandwidth
of 45.6GB/s, accounting for 34% of the nation’s total bandwidth. In 2009,
Guangzhou had 20,994,400 mobile phone subscribers and 2,801,900 Internet
subscribers, respectively increasing 6.5% and 19.0% over the previous
year.
For detailed tariff, please visit www.10000.com or dial (+86) 020 -10000.
Source: http://www.gzgov.net
4.Operating Costs
Office Buildings
Monthly Rent of Office Buildings in Outsourcing Industrial Areas
District
Monthly Rent (USD/m2） Monthly
Property
Management
Fee
2
(USD/m ）
Tianhe
2.94-4.41
0.74
Yuexiu
10-17.65
2.94-4.41
Haizhu
3.68-4.41
2.94-3.68
Panyu/Luogang
3.68-65
0.74-3.68
Source: Respective district departments
Monthly Rent of High-grade Office Buildings in Downtown Area
District
High-grade Office
Monthly
Rent Monthly
Property
Building
(USD/m2）
Management
Fee
2
(USD/m ）
Tianhe
CITIC Plaza
24.27
4.26
Times Square
11.77
3.82
Yuexiu
Guangzhou
Int’l
19.12
3.68
Electronic Tower
Guangzhou
World
13.24
4.12
Trade Center
Haizhu
Skyline Plaza
8.82
2.94
Liwan
Bank of America Plaza
11.03
4.27
Source: Property management offices of respective buildings
Labor Costs
Guangzhou has advantages in labor costs. An employee’s salary plus
welfare benefits and endowment insurance is 12-20 RMB (or 1.8-1.9 US
dollars) per hour, which is equal to 1/10 -1/20 of the labor costs in
developed countries. This will save a lot for the investors.
Software Industry
Average Monthly Salary (USD)
Software Technician
720
Network Technician
System Analysts
Programmer
516
502
562
(Based on the exchange rate on Aug. 24, 2010: $1 = 6.7999 RMB)
Source: http://chinasourcing.mofcom.gov.cn; “Wage Standards for Guangzhou Labor
Market in 2010” from http://www.gzlss.gov.cn
Electricity and Industrial Water Price
Electricity (USD／KWh)
Type
Price
<1KV
1-10KV
>=35KV
0.1321
0.1285
0.1248
Industrial Water
Sewage
Tap Water Price
Treatment Fee
(USD/m3)
(USD/t)
0.2059
0.2691
Source: Southern Power Hotline; www.gzwjj.gov.cn
Transportation Costs
International and Hong Kong, Macau and Taiwan EMS Tariff (in USD)
Target Country/Region Starting Weight: 500g
Additional
Weight: 500g or
Documents
Objects
below
Hong Kong & Macau
13.24
22.06
4.41
Japan,
S.
Korea,
16.91
26.47
5.88
Taiwan, Mongolia
Malaysia, Singapore,
19.12
27.94
6.62
Thailand
Britain,
Germany,
32.35
41.18
11.03
France
USA, Canada
26.47
35.30
11.03
Source: www.gzwjj.gov.cn
5.Industrial Projects
Outsourcing Industrial Area in Tianhe Software Park
Tianhe District is located in the city center of Guangzhou. It covers
an area of 137.40 million square meters with a permanent population of
1.15 million. It is a newly developed area in the central business district
of Guangzhou on the new city axis. It is also a key software and animation
industrial area in China. Main outsourcing projects include:
Name
Total Area
Main Functions
National
Software 122,500 m2
Technological
Industrial
Base,
innovation
area;
Tianhe Software Park
high-end
modern
Gaotang
Industrial
service
industry
Area
headquarters area;
eco-software community
Guangzhou Development Area Outsourcing Industrial Area
Guangzhou Economic & Technological Development Area (GETDA) has a
planned area of 60.62 million square meters, including six key industrial
clusters: electronic information, automobile, metal smelting, biology,
fine chemical, food & beverage. Main outsourcing projects include:
Name
Total Area
Main Functions
Creativity Building, 234,500 m2
Creative
industrial
Innovation Building
park, software park,
biopharmaceutical
park, material & energy
park
Guangdong
Software
Park
66700 m2 land, 149,000 Service
institution
m2 buildings
for software public
technical recourses;
service
institution
for software technical
incubation
and
innovation
Huanghuagang Technological Park Outsourcing Industrial Area
Guangzhou High-tech Industrial Development Area Huanghuagang
Technological Park is a national-level high-tech development park
featuring information service, pharmacy and creative industry. Main
outsourcing projects include:
Name
Total Area
Main Functions
Creativity Avenue
30,000 m2 buildings
Technological
innovation
center;
animation
public
technology
&
information
service
Huihua Trade Building
China
Center
International 35,000 m2 land
platform; industrial
design platform
High-tech
and
animation projects
Domestic
and
international
“Top
500”
enterprises,
high-end
consulting
service,
high-tech,
logistics,
software
development
Situated in the center of the Pearl River Delta, Nansha Development
Area is within one hour’s ride from any of the 14 large and middle-sized
cities in the area, 38 nautical miles from Hong Kong and 41 nautical miles
from Macau. Enjoying the convenience of several expressways, it is an
important regional transportation hub. Guangzhou Subway Line 4 connects
the urban area to Nansha where there are 12 passenger ferries to and from
Hong Kong daily. Currently, the industrial area has such industries as
automobile, iron & steel, shipbuilding, fine chemical, high-tech,
equipment manufacturing, and port logistics. Main outsourcing projects
include:
Name
Total Area
Main Functions
Nansha
Information Planned
Area: Software
and
Technology Park
2,500,000 m2
animation,
outsourcing,
electronic
information, advanced
manufacturing,
biopharmacy and new
materials
Technological
Land Area: 20,000 m2
One of technological
Innovation Center
research
centers;
software outsourcing
and training center in
Nansha
Chinese
General Building Area: 27,000 Intelligent
Chamber of Commerce m2
comprehensive
(HK) Building
commercial building
Nansha Olympic Park
Building Area: 15,800 One of technological
m2
research
centers;
software outsourcing
and training center
6. Services Organizations
Bureau of Foreign Trade and Economic Cooperation of Guangzhou
Municipality
——administrative authority of Guangzhou Municipal People’s
Government, responsible for Guangzhou’s foreign trade and economic
cooperation
Tel: +8620 88902831
Email: postmaster@gzboftec.gov.cn
Website: www.gzboftec.gov.cn
Address: No.158 Dongfeng Xi Road, Guangzhou 510170, China
Guangzhou Software (Animation & Comic) Industry Development Office
Tel: +8620 38258390
Email: rjb@gz.gov.cn
Website: www.gzsoftware.gov.cn
Address: Rm 203, 2nd Fl, No. 886 Tianhebei Rd. Guangzhou 510630, China
Guangzhou Software Development Council
Tel: +8620 66814106
Email: info@gzsdc.org.cn
Website: www.gzoutsourcing.cn
Address: 6F, Guangdong Software Building, No.7 Yuancun Yiheng Road,
Tianhe District, Guangzhou 510655, China
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Introduction and Development Strength of Shenzhen Service
Outsourcing Industry
I. Profile of Shenzhen
Shenzhen, strategically located on the south-central coast of Guangdong Province, is
China’s first Special Economic Zone. Separated from Hong Kong by a narrow river, the
city is referred to as “the Back Garden of Hong Kong”. It covers 1,953 sq/km and boasts
a population of more than 8.6 million. Shenzhen is accessible by the largest number of
international ports in China, and is also the only city with land, sea and air links all
backed by a soundly advancing economy and modern urban infrastructure. In 2008, the
city won first place in the Overall Competitiveness rankings of all cities the Chinese
Mainland and came fourth in economic aggregate among the countries’ large and
medium-sized cities, considered one of several Mainland cities with the best economic
benefits. Moreover, Shenzhen was also recognized as “the Best City for MNC
Investment” by the first International CEO Roundtable Conference.
II. Status Quo of service outsourcing in Shenzhen
By the end of 2008, Shenzhen was host to 180 offshore service outsourcing enterprises
whose services involved 15 countries and regions, primarily North America, Europe,
Hong Kong and Japan. In 2008, the outsourcing contract value in Shenzhen topped US
$480 million and outsourcing exports amounted to US $310 million. It is estimated that in
the next five years Shenzhen’s service outsourcing sector will grow by more than 35%
annually. Shenzhen’s service outsourcing business includes many industries, such as
software and IT services, finance, telecommunications, logistics, industrial design, IC
design and animation design. Among all the outsourcing enterprises in Shenzhen, a third
have agencies overseas, mainly in Japan, North America, Europe, India, Hong Kong,
Taiwan and Southeast Asia (Singapore, Indonesia, etc).
III. Shenzhen’s Advantages for service outsourcing development
I) Neighboring Hong Kong and Macao – unique location
Shenzhen and Hong Kong have been working closely to explore outsourcing markets and
are eying a prosperous future. Taking software outsourcing as an example, enterprises in
Shenzhen enjoy extensive cooperation with counterparts in Hong Kong. More than 200 of
roughly 700 Hong Kong software enterprises have branches in Shenzhen, forming a
unique mode of “store in front and factory at back” operations.
Hong Kong collects orders from international markets and Shenzhen performs subsequent
development. On the other side of the coin, many Shenzhen software enterprises have
entered the Hong Kong market, providing services such as software development, IT
technology services and business process services. From Hong Kong, they have even
managed to expand into foreign markets.
II) Great strength in service outsourcing business
Many Top 500 multinational corporations, including IBM, Microsoft, Oracle, Wal-Mart,
Flextronics, Lufthansa, UBS and Maersk, have established outsourcing service centers in
Shenzhen. Fifty-nine enterprises in the city have earned CMM/CMMI ratings, seven of
which achieved Level 5, four Level 4 and thirty-seven Level 3, underlining Shenzhen’s
strength in international service outsourcing business.
III) Solid foundation to develop service outsourcing industry
Known as the most dynamic city open to international business, Shenzhen’s export
volume is larger than any other city in China with the number of foreign-invested
companies comparable to that in China’s biggest cities. Currently, 166 of the Top 500
global firms hold stakes in Shenzhen. A solid manufacturing foundation, well-developed
export-oriented industries (electronic information, high-tech industry, modern logistics
and financing) and especially its highly advanced software industry all make Shenzhen a
software and IT outsourcing business powerhouse.
Shenzhen service outsourcing industry boasts particular advantages in the following
fields:
1. Software (IC design) and information technology outsourcing. According to statistics
from the Shenzhen Software Industry Association, more than 1,500 certified software
enterprises were based in Shenzhen in 2008, 117 with output exceeding RMB 100 million
yuan. The software industry’s gross output in 2008 reached RMB 231.7 billion yuan, up
42 percent year on year. As a pillar industry, the software sector contributed 11% to the
city’s GDP. Shenzhen’s software industry has now become globally renowned for its
independent innovation, especially competitiveness in high-end sectors.
2. For IC design outsourcing, Shenzhen ranks top in China. By 2008 it was home to 130
IC design companies with more than 5,000 employees, among whom more than 3,000 are
professional IC designers. In 2008 the gross output of the Shenzhen IC design industry
broke through RMB 2.5 billion yuan, accounting for 23% of the national total and making
it the top ranking for the third consecutive year.
3. Industrial design and animation design are also national leaders. More than 300
industrial design enterprises are active in Shenzhen, with as many as 100,000 employees.
The industry’s annual output exceeds RMB 12 billion yuan. Almost 60% of China’s
industrial design talent is based in Shenzhen.
In terms of animation design, Shenzhen is a state-ratified industrial base for the animation
industry and has three animation bases (animation cities) at present. There were 337
enterprises and about 10,000 people working on animation and games in 2007, producing
original works for films, TV shows and cartoons, making it the country’s 8th biggest
national animation base. In November 2008, Shenzhen was officially approved by
UNESCO to join the Creative Cities Network and was awarded the title of “City of
Design”.
4. Financial service outsourcing has an extensive future in Shenzhen. Its finance industry
and financial ecological environment boasts rich experiences in financial business
innovation. Having built a sound financial institutional system, by the end of June 2008,
183 financial institutes and 70 corporate bodies were located in the city, with total
financial assets topping RMB 3.16 trillion yuan. Shenzhen also enjoys other favorable
conditions, including well-developed financial businesses, advanced infrastructure
construction and close proximity to Hong Kong, where numerous international financial
institutes have clustered. With a great amount of IT talent and Cantonese-speaking
employees, Shenzhen has become the main access point of clearing systems and
clearance of HK dollars, US dollars and RMB to the Mainland, making the city well
prepared for taking up international financial service outsourcing transfer business. At
present, many banks, such as the Bank of China (Hong Kong), Standard Chartered Bank
(HK) and Bank of Communications Hong Kong Branch, have set up data processing
facilities and archive centers in Shenzhen.
5. Shenzhen’s service outsourcing is also taking a lead in logistics and supply chain
management. Logistics is the city’s main pillar industry. Among the top 100 Chinese
logistic and supply chain enterprises, 10 are from Shenzhen. Nearly 300 third-party
logistics companies are located here, adding some RMB 73.452 billion yuan in industrial
value in 2008 and accounting for 9.41% of the city’s total GDP.
6. Service outsourcing in R&D has great development potential. Shenzhen has formed a
regional innovation system where manufacturing, study and R&D are closely knit. In
2008, RMB 34.05 billion yuan was invested in R&D, accounting for 4.36% of the city’s
GDP. In the same year, 36,249 patent applications and 18,757 invention patents
applications were delivered, ranking third and second among all the cities in China
respectively; 2790 PCT patent applied, with a year-on-year increase of 24.84%,
occupying 44.5% of the country’s total applications in that year and ranking the first in
the country for five consecutive years. This reinforces Shenzhen’s capacity to take up
R&D business from home and abroad.
Two service outsourcing demonstration regions, Shenzhen Software Park and Majialong
Industrial Zone, have been set up to generate cluster-industry benefits.
IV. Incentives to Encourage Shenzhen Service Outsourcing
Development
I) training fees by BPO enterprises will be met by the government.
II) Financial support will be given to enterprises that apply for international qualification
certifications such as CMM/CMMI, or those seeking to update them.
III) If enterprises indulged in outsourcing pay taxes based on income earned from
offshore service outsourcing business, they’ll be reimbursed 80% of the amount paid on
the condition it is used for R&D and construction.
IV) Enterprises dealing with outsourcing business in the fields of finance, logistics and
cultural industries will receive financial support from a special fund the municipal
government has granted to prop up the development of the above mentioned industries,
according to regulations.
V) Once certified as High-tech Enterprises, companies dealing with outsourcing business
will enjoy favorable conditions for high-tech enterprises.
VI) Technical renovation of service outsourcing enterprises could receive subsidies on
interest payment of loans.
VII) Enterprises taking up outsourcing business taking part in promotion campaigns
overseas may receive financial support.
VIII) The government will also invest in service outsourcing public service platforms and
appropriate construction funds to improve communications and power facilities in service
outsourcing demonstration regions, creating a more comfortable and convenient working
environment for enterprises with outsourcing business.
V. Our Cases
A group of software enterprises, mainly in software outsourcing, export and IC design &
manufacturing consignment, has been settled in Shenzhen Software Park, including IBM
China’s outsourcing delivery headquarters, software giant ORACLE’s first Chinese R&D
center, Microsoft Asia’s Center for Hardware, UBS China’s Finance IT Development
Center, Kodak Commercial Imaging Service Corporation, Deutsche Lufthansa AG and
Wal-Mart Global Procurement. IBM’s Global Delivery Center (GDC) has grown into one
of the group’s four biggest GDCs in the world. Not coincidentally, in 2008, IBM
outsourcing enterprises in Shenzhen achieved a 40% increase in business volume.
VI. How can Foreign Companies (Individuals) Develop BPO Business in
Shenzhen?
I) Consigning BPO business picked up elsewhere to local Shenzhen companies
Offshore companies deliver part of their business to local Shenzhen enterprises. The
special economic area has technical advantages in BPO business in many fields, including
software and IT industry, IC design, industrial design, animation design, financial
services, logistics and supply chain as well as research and development.
Moreover, labor costs in Shenzhen are relatively low. The above two points make
Shenzhen more competitive in taking up offshore BPO business.
II) Setting up foreign-invested enterprises in Shenzhen to directly take up BPO
business
VII. Relevant Service Organizations and Contact Info
I) Shenzhen IT-BPO Promotion Council
The Promotion Council is engaged in many businesses, including custom software
development, IT services, engineering technology development BPO, supply chain
management, procurement, animation design BPO, data analysis, data mining etc. The
council represents the overall interests of BPO enterprises. Charged with helping develop
the BPO industry, it conducts industrial research, lobbies and implements government
policy, trains BPO talent, builds technical support platforms and creates various
opportunities to bring local companies to international BPO markets.
Address: 2nd Floor, Building No.8, Phase I of Software Park, Central Area of Shenzhen
High-tech Industrial Park
Postal Code：518000
Tel: 86-755-86169422/86169969
Fax: 86-755-86169268
Email: dy@szsoftwarepark.com
Website: http://219.134.65.45/expedite
II) Shenzhen Software Industry Association
The Association is in charge of registering software products, certifying and annually
verifying software enterprises, compiling software industrial statistics and managing
copyright registration. The Association will help the government carry out industrial
surveys, echo enterprises’ opinions, make policy proposals to the government and host
lectures on policy and technology, providing membership enterprises with talented people
and internationalized services ranging from technology, laws and intellectual property
rights to industrial information. It also formulates and implements industrial rules and
regulations.
Address: Room 315, 3rd Floor, Tower B , No. 1 Tongxin Road, Shenzhen
Postal Code：518027
Tel.：86-755-82100513
Fax：86-755-82094162
Website：http://www.ssia.org.cn/web/
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Zhuhai’s Investment Environment for Service Outsourcing
I. Zhuhai at a Glance
Zhuhai, one of the four earliest special economic zones (SEZs) in China, is
situated at the southern part of the Pearl River Delta (PRD) in Guangdong Province.
Zhuhai looks upon Hong Kong - the Shopping Paradise - across the sea, borders
Macao - Las Vegas of the Orient - to the south and sits 120 km southwest of
Guangzhou.
Zhuhai covers 7653 k ㎡, of which 1701 k ㎡ are land. Nicknamed “the city of a
hundred islands” for its 190 isles, Zhuhai had a population of 1.4912 million at the
end of 2009. The local GDP stood at RMB 103.769 billion in 2009, while the GDP
per capita was RMB 69,800.
Zhuhai is blessed with an exceptional ecological environment consisting out of
mountain ranges, rivers and islands in combination with its amicable climate.
According to the “Outline of the Plan for the Reform and Development of the
Pearl River Delta (2008-2020)” released by the State Council in January 2009, Zhuhai
is specified as the core city and transportation hub on the western bank of the Pearl
River mouth.
Three-pronged Transport Network
Spanning the Pearl River Estuary, the Hong Kong-Zhuhai-Macao Bridge will
link up Hong Kong, Zhuhai and Macao. The 49.9 kilometre-long structure is expected
to cost over 70 billion Yuan. Construction of the bridge started on the 15th of
December, 2009 and is scheduled to be finished by the end of 2015. Upon completion,
Zhuhai will become the only city that can be reached by road from both Hong Kong
and Macao.
Zhuhai Airport was built to the international first-class civil airport’s standards.
Passengers can access any of the four international airports in Hong Kong, Macau,
Guangzhou and Shenzhen within 2-hour travel.
The 186 km Guangzhou-Zhuhai Railway which connects Guangzhou, Foshan,
Jiangmen and Zhuhai will be completed at the end of 2011.
Guangzhou-Zhuhai Intercity Mass Rapid Transit will be a dedicated passenger
railway linking Guangzhou and Zhuhai via Shunde and Zhongshan. The travel
between Guangzhou and Zhuhai will be cut down to less than 50 minutes when it is
put into operation at the end of 2010.
Expressways running through Zhuhai include the Beijing-Zhuhai Expressway,
the Taiyuan-Macao Expressway, the Western Guangdong Coastal Expressway and the
Jiangmen-Zhuhai Expressway.
Advanced Manufacturing
After 30 years of development, six key manufacturing sectors comprising of
electronic information, home electric appliances, power and energy, biomedicine and
medical devices, petrochemical, precision equipment and two characteristic sectors
featuring printer consumables and yacht making have taken shape.
At the end of 2009, 10,852 FDI projects from 65 countries and regions had been
approved in Zhuhai, with the actual utilized foreign investment reaching USD 11.525
billion. Over 30 out of the Fortune 500 corporations have invested in Zhuhai,
including Flextronics (US), Canon (Japan), Panasonics (Japan), Bosch (Germany),
Philips (Netherlands), BP (UK), Shell (UK-Netherlands) and China National Offshore
Oil Corp. (CNOOC).
Manpower
The educational and professional training system in Zhuhai is well-structured. So
far, 10 renowned universities or colleges including Sun Yat-sen University, Jinan
University, Beijing Normal University (BNU), Beijing Institute of Technology, Jilin
University, Ziyi Medical College, Guangdong Science and Technological Vocational
College and United International College (a joint-venture by BNU and Hong Kong
Baptist University) have set up campuses in Zhuhai. There are also “three-in-one”
bases of industry, education and research that have been set up by Qinghua University,
Harbin Institute of Technology, etc, as well as 10 public laboratories established in
colleges and research institutions. Currently, the number of college students in Zhuhai
has reached 99,000.
Quality Life
Zhuhai enjoys a harmonious ecological environment and amicable climate. The
good air quality index has been close to 100% over the past few years. The urban
vegetation coverage in Zhuhai reaches 44.31% while per capita public green area
edges up to 27.1 square metres.
Featuring islands, hot springs and golf, Zhuhai boasts one of the premier leisure
tourist destinations in China.
You can also find 2 international schools, 7 five-star hotels and a host of large
shopping facilities like Wal-mart, Carrefour and Jusco in the city.
The social security situation remains stable in Zhuhai, a city which was selected
as one of the “Top 10 Chinese Cities with the Greatest Sense of Happiness” in 2007 as
well as one of the “China’s Safest Cities 2009”.
Business Environment
Pearl River Delta (GPRD), where Zhuhai city is located, is equipped with
robust supporting industries and an enviable economic base. The PRD saw a GDP of
RMB 3210.588 billion in 2009, equivalent to 1/10 of GDP in China.
Zhuhai is a major port city in China, with Gongbei Customs having the second
largest throughput in China. In 2009, the number of entries and exits going through
the immigrations reached 81 million, and foreign trade value during the same period
totalled USD 37.44 billion.
A full-fledged financial system is in place. There are currently over 50 financial
institutions operating in Zhuhai, seven of which are foreign banks including Morgan
Stanley, the Bank of East Asia and Standard Chartered.
II. Introduction of service outsourcing sector and companies
In order to facilitate the development of service outsourcing sector, Several
Measures on the Promotion of Service Outsourcing Development in Zhuhai was
released in April,2009, which provide subsidies to outsourcing enterprises and
forcefully stimulate the development of service oursourcing sector.
Gross income of service outsourcing sector in Zhuhai in 2009 is RMB ￥539
million, increasing by 16.67%, of which income from domestic is RMB￥463 million,
and income from abroad is US $ 11.23 million with a growth rate of 37.21%.
Zhuhai boasts a wealth of outsourcing enterprises, such as Software
Development Center of ICBC, Goldpac, Eastcompeace, OOCL, etc. they serve such
sectors as banking, insurance, logistics, digital entertainment，and so on.
As far as offshore outsourcing is concerned, Zhuhai is blessed with companies
like Orbita, ALi Corporation, Quest Software, AiPuJing Software, etc. Their scope of
business cover software development, software technical service, Integrated Circuit
design, information system operation and maintenance, software testing, data
processing, call center, film post production, and animated cartoon; etc. Their main
export market are United States, European Union, Australia, New Zealand, Japan, and
Hong Kong, Taiwan, Macao.
Relying on the support of several universities and 5 incubators，most of
outsourcing companies in Zhuhai is sited in the Main Park of Zhuhai National Hitech
industrial Development Zone.
Zhuhai Southern Software Park, Tsinghua Science Park（Zhuhai)，Zhuhai New
Economic Resource Developing Harbor of HIT ， Guangdong Industrialization
Example Base of Hi-tech Production, Zhuhai Hi-tech Business Incubator are 5
incubators with a total construction area of 360,000 M2.
Zhuhai National Hitech industrial Development Zone, one of the National Hitech
Zones in China, was approved by the central government in 1992, with the total area
of 139 km2, and the population of 110,000.
III. Measures to stimulate the development of service
outsourcing sector
1. Several Measures on the Promotion of Service Outsourcing Development in
Zhuhai was overarching policy ragarding service outsoucing, which was released in
April,2009, its main contents include:
In case a service outsourcing enterprise rents office in the designated area, a
subsidy will be granted on a basis of 15sqm/person. Subsidy will be offered at a rate
of RMB 15/sqm.month for rented areas below 1,000sqm while a rate of RMB
8/sqm.month will apply to the part above 1,000sqm. No subsidy will be given to the
part of rented areas which exceed 5,000sqm.
2、Subsidies will be offered to cover 30% of DDN expenses incurred for service
outsourcing enterprises, with the maximum of RMB 200,000 per enterprise per
annum.
3、Service outsourcing enterprises whose export values exceed $ 500,000 in the
previous year will be rewarded RMB 10,000 for every additional $ 50,000 export
value it contributes during the current year.
4、For those who obtain CMMI/CMM certifications for the first time, a grant of
RMB 500,000 will be awarded.
5、In case a service outsourcing company has successfully conducted overseas
merger or acquisition, a one-off subsidy of up to RMB 500,000 will be offered to
cover 30% of the pre-acquisition research, consultation and business expenses.
6、In case a CMMI/CMM certified enterprise whose service revenue in the
previous year exceed RMB 1 million participates in overseas market research or
international promotion meetings, 50% of the international travel expenses (economy
class, 2 persons for each enterprise each time) and booth fee with a ceiling limit of
RMB 100,000 per enterprise per annum will be subsidized.
7、For senior managerial or technical personnel whose annual salary exceeds
RMB 120,000, a one-off reward of 2% of the salary earned in Zhuhai will be provided
by treasuries at the relevant levels.
8、In case a service outsourcing firm delegates a world-recognized software
company to train its senior staff overseas, 50% of the training fees will be subsidized
with a ceiling limit of RMB 10,000 per person per year.
9、Once any service outsourcing enterprise employs a person to engage in
training on service outsourcing and concludes a labor contract with him for two years
or more, the local treasury shall provide the enterprise with 50% of the training
support of no more than RMB 1,000 per person and RMB 100,000 per enterprise per
year.
10、For introducer (excl. organizations or individuals salaried by public finance
departments) of service outsourcing project with over RMB 10 million registered
investment will be rewarded up to RMB 300,000 based on actual registered total
capital (3/1000 for the part below RMB 10 million and 5/1000 for the portion above).
The reward will be reviewed and assessed annually, and is subject to application by
introducers to relevant review panels.
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Dongguan’s Investment Environment for Service Outsourcing
1. Dongguan: The Most Economically Dynamic City in China
Dongguan is an ancient city with 1670-year history, and a newly-rising
industrialized city in Guangdong Province of China. Meanwhile，it’s an important
manufacturing base and sourcing center of IT products in the world. Dongguan covers
a land area of 2,465 km2, with a resident population of 6.9 million, among which local
population is over 1.7 million. Since China’s adoption of reform and open policy in
1978, Dongguan’s annual GDP growth rate has been hitting 18%, being one of the
cities with fastest economic development in China. In 2009, Dongguan’s GDP
reached RMB 376.326 billion yuan, ranking the 4th regarding the total economic
output，accounting for 1/10 of the provincial total.
(1) Superior Geographic Location and Convenient Transportation Network
Located on the east bank of Pearl River Delta and middle-south of Guangdong
Province, Dongguan stands between Guangzhou and Shenzhen cities. It’s only 90 km
away from Hong Kong. Foreign investment enterprises in Dongguan could enjoy
great convenience of shipping products to the overseas market through the
international transportation center- Hong Kong, or the ports along the Pearl River.
Three International Airports:
Within a radius distance of 50 km from Dongguan central area, there are
Guangzhou International Airport in the north and Shenzhen International Airport in
the south, which could be reached in only 50 minutes’ drive through expressways. It
takes about 2 hours to Hong Kong International Airport by driving.
Four Railways:
The Guangzhou-Kowloon Railway, Guangzhou-Shenzhen Quasi-high-speed
Railway, Guangzhou-Meizhou-Shantou Railway and the Beijing-Kowloon Railway
all interchange in Dongguan, connected with the national railway network. The
Customs of Dongguan Railway Station is a Class A Customs for entry-exit inspection
and quarantine of the through trains from Guangzhou, Beijing and Shanghai to
Kowloon. Nowadays, the Guangzhou-Shenzhen-Hongkong PDL (passenger direct
line) is under construction as well in Dongguan (as known as
Guangzhou-Shenzhen-Hongkong express railway) ，connected with the inner-city
railway transportation at Hu-Men station. The transportation could be reduced from
100 minutes to 40 minutes between Hongkong-Guangzhou and the traveling among
GuangZhou-ShenZhen-Hongkong only takes one hour when the PDL is finished.
Five Ports:
The Humen Port in Dongguan is a Class A Port open to the foreign vessels. The
Huangpu Port and Xinsha Port in Guangzhou, the Yantian Port and Shekou Container
Terminals in Shenzhen are all within 1 hour’s drive from Dongguan, while Hong
Kong Container Terminals are only about two hours’ drive away.
Highway Network:
The length of existing highways in Dongguan totals over 4000 km, with
expressways extending to all directions. Dongguan’s highways’ density
reaches1.623km/ km2, which ranks the first among the prefecture-level cities in China.
The convenient traffic network between Dongguan and neighboring cities has come
into shape composed of 4 major inter-city expressways traversing Dongguan: The
Guangzhou-Shenzhen
Expressway,
Dongguan-Shenzhen
Expressway,
Guangzhou-Huizhou Expressway, and Beijing-Zhuhai Expressway. A lot of
throughways inside Dongguan completed lately have developed a
“One-Hour-Driving” network in the city.
Light Rail Under Construction
Dongguan is vigorously developing the rail transport. At present, 2 inter-city
lines
are
under
construction （ Guangzhou-Dongguan-Shenzhen
and
Dongguan-HuiZhou inter-city lines）, which connect the three-city central areas of
Guangzhou, Shenzhen and Huizhou. Meanwhile, Dongguan will also have 4
inner-city lines(R1-R4), which could reach every town in the city and connect to the
inter-city lines,Guangzhou-Shenzhen railway and Guangzhou-Shenzhen-Hongkong
PDL(passenger direct line). This can achieve a quick and convenient transportation
between the central area of Dongguan to Guangzhou Shenzhen and Huizhou.
(2) Well-developed Industrial Clusters
Dongguan has developed into an international processing and manufacturing
base in a moderate scale, with mainstay industries of electronic information,
communication equipment, electric & machinery, auto part and accessory, hardware,
plastic, textile & garment, furniture, building material and paper-making etc. Around
30,000 industrial enterprises in Dongguan have formed a well-developed industrial
chain. Dongguan is especially well-known for its IT industry. There are more than
3700 enterprises in this field, manufacturing up to 95% of all the components and
peripherals of a computer. Export of IT products including computer and peripherals,
electronic communication equipment, electric devices and electronic components in
2009 reached USD 13.803 billion.
(3) Dongguan: One of the Cities with Most Foreign Investment
Dongguan is one of the largest international manufacturing and processing bases
in China. A large number of MNCs have chosen Dongguan as their investment
destination. There are about 14000 FIEs in Dongguan, including 85 enterprises set up
by 50 World’s Top 500 businesses. In 2009, foreign investment of Dongguan
increased steadily, with 579 new FIEs projects and total actual investment of USD
2.594 billion increased by 6.02%. By the end of 2009, the total accumulative actual
foreign investment exceeds USD 49.52 billion. Total Export value of FIEs reached
USD 55.169 billion, accounting for 4.6% of the nation.
(4) Strong Support in Human Resources and Technology
Dongguan’s education achieves great development, which wins it the title of
Guangdong’s Excellent City in Education. By the end of year 2009, there have been 6
institutions of higher learning, 29 vocational schools (including the municipal 4
schools of technicians), 42 senior high schools, 144 junior high schools and 337
primary schools in Dongguan. Among which, there are 251 private high and primary
schools, 10 state-level key vocational schools (including the municipal schools of
technicians) and one key vocational school of Guangdong Province.
At present, the enterprises in Dongguan have recruited and trained several
hundred thousand high caliber middle and high-level managerial and technical staff
who have both received higher education and familiarized themselves with the
advanced management expertise of domestic and overseas companies. The city has
been enhancing the exchange and cooperation with major universities, research
institutes and technical institutions. The long-term cooperative relationship has also
been established with 28 famous universities in China, including Tsinghua University
and Peking University. Such cooperation has brought about various research institutes
and institutions of education and training for advanced human resources, such as IT
colleges, research institutes and branches of postgraduate education.
(5) Well-Developed Infrastructure and Excellent Environment for Business,
Living and Recreation
In 2009, Dongguan has been actively building an excellent urban environment
for business, living and recreation. The whole city changes with each passing day.
More & more public facilities are being constructed & completed. Last year, 28 major
infrastructure projects including three new hospitals and the city’s Center for Disease
Control and Prevention were finished. Another 38 had begun its establishment,
including construction of Dongguan’s origin station for R2 of light rail, extension of
Dongguan Avenue and Dongguan Basketball Center etc. Meanwhile, many other
infrastructure facilities were completed as well, such as the building of the ring road,
the phase three of Dongguan-Shenzhen Expressway, Humen-Xiegang Expressway, 14
roads of city traffic network, 17 large-scale electric power transmission and
distribution centers, newly finished 163 km of the LNG project, 123 water
conservancy, disaster prevention projects and 50 projects in eco-environment
improvement.
Dongguan’s service industry enjoys booming development. It has 5 national
exhibitions, 95 star-rated hotels, among which 19 ones are five-star. Shopping is very
convenient in Dongguan, with such large shopping centers as Wal-Mart, Carrefour,
Metro and all styles of shopping districts. Noble villas and apartments have been built
for the residence of foreigners. There are 6 golf courses and many country parks in
Dongguan, providing a comfortable recreational environment for overseas
businessmen.
2. Development of Dongguan’s Service Outsourcing Industry
Service outsourcing was started late in Dongguan and the total amount is
moderate. So far, we have 18 foreign investment enterprises of service outsourcing in
our city. Cumulative foreign investment is US$0.302 billion, is 60.6% of total service
industry investment, involving US$0.216 billion is contract foreign investment, and is
82.12% of uses foreign investment in service industry in our city. Grouped by capital
source, we have 9 from Hong Kong, 3 from Taiwan, 2 from USA and 1 each from
Canada, Singapore, Korea and Japan. Grouped by industry, there are 8 of ITOs
(Information Technology Outsourcing) and 10 of Technical BPOs (Business Process
Outsourcing).
Recent years, developing modern service industry in the industrial parks is a
breakthrough and main direction in our city. Actively encourage the industrial parks,
such as Songshan Lake, Humen Port and Eco-Park, which are high-end parks, to plan
and build industrial cluster space with high standard for service outsourcing. Develop
various kinds of service outsourcing according to the current situation of the parks.
Continuously enlarge the development space for service outsourcing, attract
multinational corporations and enterprises abroad and individuals to set up service
outsourcing company, and form domino effect of industrial cluster.
3. Industrial Park Undertaking the Service Outsourcing Projects
Songshan Lake Science and Technology Industry Park (SSL) was established in
November 2001 as a provincial level new and high-tech industry park with the
approval of the People’s Government of Guangdong Province. The Park boasts a
superior geographic position, being located in the middle south of Guangdong
Province, at the heart of the Pearl River Delta and right in the middle of
Guangdong-Hong Kong Economic Corridor, adjacent to Hong Kong and Shenzhen to
the south and bordering Guangzhou to the north. With a total planned area of 72 km2,
including a fresh water lake area of 8 km2 and an area of 14 km2 for ecological
greening, the Park has maintained a favorable ecological environment. By June of
2010, SSL
(1) Bio-pharmaceutical Outsourcing
Presently, the Dongguan Songshan Lake Sci. & Tech. Industry Park (SSL) has
introduced more than 50 bio-technology enterprises including Guangdong Jinmeiji
Group Co., Ltd., HEC Group Co., Guangdong Handsome Bio-pharmaceutical Co.,
Ltd., etc. and also the research center and colleges specialized in the
Bio-pharmaceutical, such as Southern Medical University, Guangzhou University of
Chinese Medicine, Southern Sea Marine Biotechnology & Bioengineering Center of
Sun Yat-san University. The Southern Medical University has setup an animal
experiment base in SSL which will become the first comprehensive experiment
platform for zoopery in China. It is a great solution to bio-pharmaceutical industry
developed in Western countries with restriction on animal experiment and also
appeals to the advanced bio-pharmaceutical enterprises from Western countries.
(2) Financial Software Outsourcing
The transformation and upgrading of Dongguan’s traditional competitive
industries causes a strong demand for the financial service. While Dongguan was
listed as one of the provincial pilot city of technology and finance, SSL speeded up
the establishment of service area for financial reform and innovation and was
planning to setup the industry park for financial service outsourcing. Also, SSL has
brought in various background service organizations of famous foreign and domestic
financial organizations including the data process center, calling center, data recovery
center and training center, etc. Today, some large financial organizations like Sunshine
Insurance Group, Sino Life Insurance Co., Ltd. and Excel Technology International
Holdings Limited have established their business in SSL. And the center of settling
accounts of fund for Guangdong Branch of People’s Bank of China is aiming to settle
down in SSL. The Excel Technology International Holdings Limited is a listed
company held by the Cheung Kong (Holdings). It is a famous Hong Kong IT
company specialized in R&D of financial and enterprise management software
providing various kinds of application services and solutions for the financial
enterprises. Its clients include famous banks from oversea like Hang Seng Bank,
HSBC Bank, Standard Chartered Bank and those from domestic like China Bohai
Bank, Huaxia Bank, Industrial Bank and China Minsheng Bank Corp. Ltd., etc.
(3) Cultural and Creative Industry Service Outsourcing
As Dongguan defined the cultural industry as one of the pillar industry and The
China International Animation Copyright Fair have settled in Dongguan, SSL is set to
rely on Dongguan’s manufacturing base of animated cartoon derivatives and focus on
animation industry to develop its R&D and trading capability on animated cartoon
derivatives and create the best docking platform for China’s animation industry. At
present, a large number of animated cartoon derivatives manufacturers who lack of
own brand and cultural creativity urgently call for cultural creative service
outsourcing. Therefore, SSL has introduced more than 50 enterprises of cultural and
creative industry which cover the creation and service platform of animation,
development and trading of animated cartoon derivatives, cyber games, media and
industrial design, and created an almost prefect chain of cultural and creative industry
and a strong capability of undertaking the service outsourcing.
4. Investment Promotion Policies for Service Outsourcing Projects
In order to attract more major investment projects in line with The Catalogue for
the Guidance of Foreign Investment Industries of Dongguan, the municipal
government issued the Reward Scheme for Major Investment Projects Promotion in
Dongguan in May, 2009. The following is the abstract of the stipulations regarding
overseas invested service outsourcing projects:
Introducers who introduce industry-supporting service projects (including R&D
centers or institutions, investment companies and also its regional headquarters and
service outsourcing enterprises) with independent legal entities (no limit of registered
capital), may be rewarded in the rate of RMB 40,000 for every USD 1 million
registered capital, with RMB 5 million as maximum for a single project.
The identifications of R&D centers or institutions and investment companies
(including regional headquarters) shall be in line with the relevant national
stipulations. The service outsourcing enterprises refer to the service outsourcing
providers who sign mid-term or long-term contract with the service outsourcing
buyers, provide outsourcing business and acquire the international verifications of
CMM, CMMI, etc.
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Several Opinions for Foshan to Facilitate the
Development of Service Outsourcing
With a highly developed open economy and a profound
manufacturing foundation, Foshan possesses favorable conditions
for promoting service outsourcing development. Now the following
opinions for promoting service outsourcing development have been
put forward to carry out the “3+1” plan of informatization
development
(3
industrialization,
purposes:
informatization
informatization
enhances
brings
urbanization,
along
and
informatization facilitates internationalization; and 1 environmental
supporting facility: policy, capital, talent and technology guarantee),
to undertake international service outsourcing transfer actively, to
promote development of modern information service industry, and to
facilitate industrial structure optimization:
I. Guiding ideology
Guided by the Scientific Outlook on Development, Foshan
regards service outsourcing as the priority for achieving leapfrog
development of service industry. Taking full advantage of the golden
opportunity of international service industry transfer, Foshan
facilitates the implementation of policy made to promote the process
of undertaking international service outsourcing, creates excellent
investment and living environment, and focuses on establishing
service outsourcing cluster that has concentrated industries and
peculiar characteristics, all of which will promote the flourish of
service outsourcing.
II. Development goals and priorities
(I) Development goals
The development goals are to take full advantage of the chance
of new round of service industry transfer, to introduce some
large-scale outsourcing enterprises both home and abroad, to foster a
number of local backbone enterprises that possess intellectual
property and self-own brands, to build Foshan into a relatively
large-scale industrial cluster for undertaking service outsourcing and
a talent highland with high potential. By 2012, Foshan aims at
attracting more than 10 famous multinational corporations to transfer
their service outsourcing to Foshan, fostering 100 thousand
professionals specializing in service outsourcing, and introducing
and cultivating 100 large-scale and medium-sized service
outsourcing enterprises.
(II) Development priorities
Relying on the foundation and advantages of Foshan,
information technology service, such as financial background
service, software development, R&D (research and development)
and design, and application and management of information system
should be the priorities for development. Speeding up of
development of business flow outsourcing such as financial
management, human resource management, global purchase center
of multinational corporations, logistic management, supply chain
management, TPL (third-party logistics), customer service and data
processing and son on should also be the highlights. With Foshan
Hi-tech Industries Development Zone as the main body, a
demonstrative service outsourcing zone will be established and a
number of service outsourcing enterprises will grow larger and
stronger.
III Main measures
(I) Making development plan and establishing service
outsourcing industrial base with high starting point
Overall plan for service outsourcing industry of the whole
Foshan City must be formulated as soon as possible and
development of service outsourcing industry must be facilitated
actively. In order to optimizing industrial layout, Foshan is to
accelerate the construction of “one zone and six parks” according to
the requirements of national demonstrative service outsourcing parks,
with high-end service outsourcing industrial bases such as Foshan
Hi-tech Industries Development Zone, Guangdong High Tech
Service Zone For Financial Institutions, Nanhai Software Park,
Chancheng Park in Gaoxin District, and Foshan Creative Industrial
Park and so on as the highlights. Other Parks will develop into
service outsourcing industrial bases with peculiar characteristics
according to their own orientation and features. In this way, the
service outsourcing industry in Foshan can achieve all-round
development and form a development pattern that has clear
highlights, correct orientation, complementary advantages and
unique characteristics.
(II) Increasing financial investment and supporting
development of service outsourcing
Each year, the Municipal Government allocates certain amount
of fund, from “special fund for municipal economic and
technological development”, to be used to support the development
of service outsourcing, including construction of public technology
platform and information platform, the training and certification of
service outsourcing enterprises, the cultivation and introduction of
talent, and investment increase in and market expansion for service
outsourcing. The specific ways of providing fund support is to be
formulated otherwise.
(III) Paying attention to bringing in and cultivate service
outsourcing enterprises and helping them to grow larger and
stronger
1. Encouraging enterprises home and abroad to establish offices
in Foshan to develop service outsourcing. Foshan encourages both
domestic and foreign large-scale service outsourcing enterprises to
establish corporate headquarters, regional headquarters, R&D center,
and sole proprietorship in Foshan, or to cooperate with Foshan
enterprises to establish joint venture in the field of service
outsourcing.
2. Easing market access and simplifying approval flow.
Conveniences will be provided for servicing outsourcing enterprises
in industrial and commercial registration and administrative approval.
For businesses not involving advance approval, the industrial and
commerce department can directly approve the application of
enterprises to include service outsourcing in their business scope,
which will make it convenient for these enterprises to undertake
service outsourcing according to international practices. For those
that need advance approval, relating department should simplify the
approval procedure and enhance the approval speed. New areas
involved in undertaking international outsourcing should be
approved if there is nothing prohibited by law.
3. Encouraging service outsourcing enterprises to grow larger
and stronger. Enterprises that can satisfy the conditions and
standards of hi-tech enterprises can enjoy preferential policies
according to regulations after being approved as hi-tech service
outsourcing enterprises.
4. Encouraging enterprises to enhance innovative and R&D
ability. Foshan gives full support to enterprises for them to establish
R&D centers, bring in R&D talent, increase technological
innovation investment, enhance independent innovative ability, and
develop key and core technology that has independent intellectual
property right. R&D expenses used for developing new technology,
new products and new technique that have not been transferred to
intangible assets and included in current profits and loss will be
deducted by 50%, and for the part of expenses that have been
transferred to intangible assets, 150% of the cost of intangible assets
can be amortized.
5. Supporting service outsourcing enterprises to expand
international market. Medium-sized and small enterprises are
encouraged to develop international market fund and export-oriented
private enterprises are encouraged to develop special fund. Support
will be given to qualified service outsourcing enterprises for them to
develop international market, promote business and participate in
international professional activities.
6. Encouraging service outsourcing enterprises to create and
foster their own brands. Service outsourcing enterprises are
encouraged to construct self-own brands, and those that are qualified
according to relating national, provincial and municipal regulations
can enjoy fund support offered by government.
7. Opening international certification and offering certification
fund support for service outsourcing enterprises in Foshan.
International certifications that can receive fund support include the
certification of: Capability Maturity Model Integration (CMMI),
Capability Maturity Model (CMM), People Capability Maturity
Model
(PCMM),
Information
Security
Management
(ISO27001/BS7799), IT Service Management (ISO20000), and
Service Provider Security (SAS70) and so on.
8. Creating excellent investment and financing environment.
Various loan guarantee organizations are spurred to give policy
preference to service outsourcing to stimulate financial capital,
private capital and venture capital fund to flow to service
outsourcing enterprises. High-end service outsourcing enterprises are
encouraged to expand production and operation scale and enhance
market development ability of the brand by asset restructuring,
merger and acquisition or going public home or abroad. Credit
insurance companies are supposed to enlist service outsourcing
business into the scope of credit insurance and relating financial
institutions are pushed to give priority in financing according to the
insurance policies of credit insurance companies. Credit guarantee
fund for medium-sized and small enterprises are coordinated to give
priority to service outsourcing enterprise when conducting financing
guarantee.
(IV) Cultivating and bringing in talents
1. Making full use of and enhancing existing public training
platform. Attention is mainly being paid to fostering practical and
innovative talents that are badly needed by service outsourcing
enterprises and attracting and encouraging international famous
training organizations and large enterprises to conduct service
outsourcing training and train talents in the field of management,
market development, and talents that can feed the European,
American, Japanese and Korean market.
2. Encouraging various kinds of talent training in service
outsourcing. Cooperation between enterprises and universities or
institutions is promoted to strengthen talent training for service
outsourcing. Multinational and service outsourcing enterprises are
encouraged to custom talent with universities. Pre-post training and
trainings on talent qualification, international certification, relating
laws, industrial standards and intellectual property are also
promoted.
3. Attracting high-end service outsourcing talent to work or
start business in Foshan. High-end service outsourcing talents,
including software architect, system engineer, project manager,
senior designer, financial analyst, actuary, international service
outsourcing market developer and so on are the priorities for talent
introduction. For these talents, Foshan will give them preferential
policies to help them to get residence permit or registered permanent
residence and help their children to go to school. Talents that are
invited to work in Foshan municipal organizations or enterprises will
get housing allowance, benefit premium and settling-in allowance.
4. Supporting colleges and universities in Foshan to construct
subjects relating to service outsourcing. Universities are encouraged
to set up service outsourcing as a research direction by integrating
relating resources. The proportion of knowledge relating service
outsourcing should be enhanced in class, and the skill training on
service outsourcing should be strengthened. High level subjects
including international trade, international finance, corporate
management, R&D and design, software development and
application, and foreign language and so on must be highlighted and
be able to offer intellectual support for service outsourcing industry.
At the same time, various relating industrial associations should help
vocational schools to train teachers that can teach subjects
concerning service outsourcing.
(V) Developing and promoting international outsourcing
cooperation actively
1. Promoting investment increase in service outsourcing
actively and orderly. The function of government, agencies and
enterprises should be given to full play. Special working scheme
should be made according to the strategy and intent of service
outsourcing of multinational corporations. Offshore service
outsourcing business should be strengthened through diversified
custom service and investment increase.
2. Promoting enterprises to develop offshore service
outsourcing business. High-end service outsourcing enterprises are
encouraged to develop offshore outsourcing business and software
export, to participate in famous exhibitions and professional
conference in foreign countries, and to send technological
researchers to go abroad to receive training and participate in project
development in foreign enterprises.
3. Making use of the advantage of Foshan-Hong Kong-Macao
cooperation and widening cooperation space for service outsourcing.
Take full advantage of the chance of “Establishing CEPA
Demonstrative City” of Foshan, Foshan strives to establish an
international platform for service outsourcing cooperation and
enhance the competitiveness of Foshan, Hong Kong and Macao in
the international outsourcing market. Foshan will actively undertake
the outsourcing business from Hong Kong and Macao such as
financial background service, software development, R&D and
design, and data processing relating to logistics. In this way, Foshan
and Hong Kong and Macao will form complementary advantages,
and the advantages of the three places in technology R&D, market
development, project management, capital and finance and modern
service can be given full play to develop service outsourcing market
in European, the United State and Japan.
(VI) Strengthening leadership and coordination and
creating favorable environment for service outsourcing
development.
1. Establishing a leading team in charge of service outsourcing.
A leading team is set up by Foshan Municipal Government to take
charge of the organization and guidance of service outsourcing of the
whole City. Under the leading team, an office is set up to be
responsible for the coordination and daily work for developing the
service outsourcing industry. All zones and parks should also
establish corresponding organization system to promote the
development of local service outsourcing.
2. Establishing and improving policies, laws and regulations
relating to service outsourcing. Industrial standards shall be
established and improved, market order shall be standardized,
service quality shall be improved, and service outsourcing
enterprises should be guided to set up industrial associations which
can be in charge of information consultation, market expansion and
talent training and so on.
3. Establishing system of public service platform. A public
service system serving for the service outsourcing industry should be
constructed, including public service platforms such as talent
introducing and investment inviting platform, information
consultation platform, technological support platform, talent support
platform, business R&D platform.
4. Reinforcing protection for intellectual property. Intellectual
property infringement should be punished in order to create a
favorable operating environment for service outsourcing. Law and
regulations concerning business secrets, software copyright and so
on should be made and improved, and the implementation of
protecting intellectual property should be supervised. Punishment for
intellectual property infringement shall be harsher. Service
outsourcing enterprises should be assisted and guided to establish
intellectual property management system.
5. Creating favorable living facilities and environment.
International living supporting facilities and public management
service system shall be established and infrastructure construction of
entertainment, education and medical agencies should be promoted.
Foshan will also actively provide convenience for investors and
workers in Foshan for their exit and entry of China, their residence
and their children’s going to schools. In this way, a favorable
environment that is suitable for both starting business and living a
good life is provided for them.
6. Creating favorable consensus environment of service
outsourcing development. All news media in Foshan should further
expand the publicizing of service outsourcing especially high-end
service outsourcing, report achievements and experiences of serve
outsourcing enterprises in time, popularize relating knowledge, and
publicize relating policies to create a favorable consensus
environment for the service outsourcing development of Foshan.
7. Establishing scientific and reasonable statistical system for
service outsourcing indices. According to relating regulation and
with the service outsourcing management system by Commerce
Department as the foundation, a statistical system for service
outsourcing indices shall be established gradually to master the
specific situation of service outsourcing enterprises and outsourcing
business, to strengthen study on service outsourcing development
trend, to sort out and analyze information and to supply foundation
for scientific decision-making.
*At present, according to the financial plan of Foshan City,
RMB 1 million out of the foreign trade development fund has been
set up as the special fund for service outsourcing and relevant
management methods of the fund is being formulated.