offshoreOutsourcing2China

Hangzhou Software Park: An Outsourcing Base in Paradise

Hangzhou software park, a 80,000 square meter national outsourcing base, is located in the High-Tech Zone in downtown Hangzhou. To date, more than 1,200 software enterprises have settled in the area, including one of China’s homegrown stars-  Alibaba, the world’s largest B2B internet marketplace.

The city of Hangzhou, built around the West Lake, is one of China’s most famous scenic and historical attractions and has often garnered the fitting nickname “paradise on earth”. Since 2005, Hangzhou has consistently been ranked number one on FORBES magazine’s annual ‘China’s Best Places for Business’ list. It’s easy to see why- no other city in China can offer such an exceptional combination of lush scenery on one hand and a dynamic business environment on the other.

Park Profile: There are over 1,200 software enterprises associated with the park. Among these enterprises, over forty have CMM/CMMI certifications.

Offshore outsourcing services in 2007 were valued at US$700 million and involved 140 enterprises. The majority of services are in the ITO & software development area (70%), although SI (25%) and IC (3%) are present as well. It is worth mentioning that Hangzhou is also an Integrated Circuit Design Industry Base approved by the state science and technology ministry.

Tata Consultancy Services first opened an office in Hangzhou’s park in 2002 as an outsourcing center for General Electric. Other international companies involved with the park include Samsung, Microsoft, Nokia, Intel, NEC, Infosys, Motorola, TCS. Most of these companies have also established their R&D centers in the parks.

Internet/Telecommunication Infrastructure: The city has well-developed communication infrastructure, including designated trunks for international gateway (>75G bandwidth). There are over 4.3 million fixed-line users, 7 million mobile users, and 1.5 million Internet users in a city of nearly 7.5 million inhabitants.

Top Universities and Talent Pool: Zhejiang University is among the top 5 universities in China. It is also the largest university in the country, with a student body of about 40,000. Other universities include Zhejiang Industry University, Zhejiang Normal University, etc, with the total enrollment adding up to 400,000 students on campuses citywide. Every year, 20,000 students graduate who specialize in the areas of outsourcing, software/hardware, animation, and IC.

Transportation: Hangzhou International Airport receives international flights from Japan, South Korea, Singapore, and Hong Kong. Regularly scheduled air service also connects Hangzhou with all major provincial capitals and financial centers in China.

Hangzhou’s location gives it easy access to other major industrial cities nearby. Shanghai lies just under two hours away by either car or train.

The world’s longest sea-crossing bridge (36 kilometres), Hangzhou Bay Bridge, is opened for use each May. The Bridge has six lanes in both directions and links Ningbo’s Cixi county, a port city in the south serving dynamic exports, to Shanghai.

Government Incentives and Goals: Like other outsourcing parks, the city of Hangzhou also receives similar incentives for outsourcing activities in the Park, including favorable tax codes, subsidizing training & estate, etc.

The city government is also very goal-oriented; their short-term goals (to be achieved by 2010) include:

(1) Reach (annual citywide) revenue of USD 1B,
(2) Have >50 enterprises pass CMM/CMMI3, and at least 5 enterprises pass CMM/CMMI5,
(3) Create several mega-outsourcing enterprises with more than 10,000 employers.