By Brian Schwarz
When Hayden Hong came to Shanghai in September 2005, he was impressed by the Jin Mao Tower in Pudong, then the tallest building on the Chinese mainland. For him, it represented China’s talent and potential. “I arrived at the Pudong Shangri-La Hotel and looked up at this humongous tower. I instantly decided that this city could compete in the world,” he explains.
Inspired, Hong, who had started a number of businesses in the US and who previously worked as a project manager and senior architect at GE, set out to create an IT outsourcing business in the city. Today, his firm, Long Circle, a US-registered company, provides Shanghai-based IT outsourcing services including GPS, mobile, VoIP, wireless, video surveillance, .NET and communication products to high-tech clients from around the world, including Motorola and China Telecom (中国电信).
The growth of firms such as Long Circle is indicative of the rapid emergence of the country as a leading IT outsourcing destination. While in the past many firms were reluctant to outsource operations to China, the country is now rapidly emerging as a serious challenger to global market leader India, while the growth of large Chinese corporations able to compete on a global scale has also opened up an increasingly lucrative domestic outsourcing market. The government has recently introduced a series of tax breaks and incentives aimed at accelerating the industry's development.
However, with the global economy in freefall, and with rising costs and currency appreciation making China less cost-competitive, the industry faces the challenge of repositioning itself if it is to continue its rapid growth.
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