Study On The Comparative International Competitiveness Of Service Outsourcing Between China And India

With the development of global economy, world service trade has far exceeded the development of commodity trade. Service outsourcing is the most rapidly growing trade.Nowadays outsourcing has become a global trend. More and more enterprises are integrating outside resources in order to focus on core business and reduce costs. Service outsourcing industry is growing rapidly. China and India are the main outsourcing country in the world. The key issues in this article are to discuss the current situation, production factors and demand conditions.Firstly, this paper outlines the basic concepts and theories of service outsourcing and industry competitiveness. Then it introduces the situations of major outsourcing country in the world. Secondly, with the introduction of international trade competitiveness index and Porter's Diamond Model, the author build the comparing service outsourcing industry models based on quantitative and qualitative theories. Finally, according to the results of quantitative and qualitative analysis, this paper promotes some recommendations for the development of China's service outsourcing industry. In quantitative analysis, the author use international market share index (MS), the use of trade competitiveness index (TCI) and the revealed comparative advantage index (RCA) to compare China and India international competitiveness. The data shows that India's service outsourcing industry has a comparative advantage. To the factor of production, China's infrastructure and human resources have a greater advantage, while India is superior to the location and the development of service outsourcing industry associations. To the demand condition, China's domestic market has greater potential. To the related industries and support industries, China has a good manufacturing base and logistics system. India has more competitive information technology and financial system. To corporate strategy, India outsourcing business scale and development capabilities have a larger advantage than China. To the opportunities, as the exchange rate fluctuations of the dollar, euro, sterling and ruble, India's cost advantage is gradually weakened. But China has more room to develop market in Europe, America, Japan and South Korea. To the government, China and India governments are both actively developing policies to promote the development of service outsourcing industry.