Outsourcing Testing to China
China's emergence as a global trading power began more than a decade ago when it surpassed South Korea and Taiwan as the largest exporter of athletic shoes to the US. In 2002, China surpassed long-time manufacturing powerhouses Japan and Mexico as America's biggest single source of consumer electronics.
In Europe, Waterford Wedgewood recently closed two factories in the UK and outsourced more than 1,000 jobs to China. At the time of the closures, CEO Redmond O'Donoghue was quoted as saying, "we have a loyalty to Europe, but we can only sustain jobs [here] if we're competitive."
O'Donoghue's sentiment rings true throughout the western world, as jobs in both Europe and the US continue a seemingly unending exodus to the cheaper, more fertile lands of China. With factories in Shanghai and Shenzhen employing female workers who earn an average salary of 0 per month, it is no wonder many of the world's manufacturers have an eye focused on China as a way to maintain or increase competitiveness and profitability.
Traditional consumer goods such as textiles and electronics are not the only areas where China is making competitive inroads. China is also mounting a serious challenge to Asian and Western suitors in the technology arena, as software development and software testing are both growing sectors in China's burgeoning economy. These industries have a huge effect on the localization industry. They directly influence how our industry will maintain profitability in the future. While 2004 may be the Chinese Year of the Monkey, there is nothing monkey-like in the way China is managing growth and tempting global companies to invest in their economy.
China as a Source of Localization Testing
As of late, many discussions have arisen in the localization industry regarding the outsourcing of engineering and testing functions to China. Many companies under intense pressure to increase gross margin have begun to bypass traditional US or European-based vendor solutions, or indeed their own operations, in favor of China.
To continue reading, please complete this simple form below and download the full PDF version of this article, published in the April 2004 issue of the ClientSide News magazine.
Check out our blog for content on topics that matter to your business. Subscribe to get the latest.