China Versus India for IT Outsourcing

Just read Computer Weekly’s Would you offshore your IT to China? on Chinese outsourcing company, VanceInfo and its recent merger of equals with HiSoft to form Pactera Technology International. My law firm has represented VanceInfo for many years so I am going to remain silent on the merger, but that representation has given me a somewhat inside look at how China is perceived as a destination for IT outsourcing.

The Computer Weekly article also polls its readers as to whether they would outsource their IT to China and the yes and no votes are exactly equal. What I find fascinating is how many companies are so much slower to outsource to China than they are to India and their explanation is often something along the lines of how China is the wild wild west or that it has no IP laws. The funny thing about this is that each year the US Trade Department does a priority watch list of the worst countries on IP protection and each year both India and China (and Russia too) are on that list, usually made up of about ten countries. And when it comes to handling commercial disputes, China consistently does quite well in the World Bank ratings (top 20), whereas India is always near the bottom. Now I am not saying that these statistics mean China is safer than India for outsourcing (especially since I am of the view that in the end the best analysis is by company, not by country), but I am saying that the IP fears regarding IT outsourcing to China are exaggerated, at least as compared to India.

Of course, for all I know, the poll results for India would have been similar, but I do not think so.

What do you think? Would you outsource your IT to China? Are you already outsourcing IT to China? Are you any more or less willing to outsource your IT to China than to India? What about other countries, such as Thailand or Malaysia or the Philippines or Vietnam or Mexico or Colombia or Russia or the Ukraine?