Tough it’s often the topic of heated political debate about jobs and national interest, outsourcing – as its champions like to point out – is really just the latest form of an Economics 101 tenet: comparative advantage – leveraging the strengths of different labor markets.

With rapid innovation of digital technology, the increasingly popular notion, at least from “globalization” proponents, is that we’re on the verge of an outsourcing revlution whereby work that can be digitized can be transferred around the globe via email in a matter of seconds, to places where labor and overhead are cheaper. Increased efficiency and profitability will follow.

In theory, at least. China’s huge population means that, through sheer demographic might, many of its labor markets have the edge on affordability that makes the Middle Kingdom such an attractive place to produce. But with “business process outsourcing” (BPO), some think the ability of Chinese companies to do tasks such as da ...

...O business than other Asian rivals are.” He cites the emerging BPO hub of Xi’an. “You can find workers like in a Chinese factory – except that they are sitting at computer terminals processing medical-claim forms or car-loan applications from all over the world,” he explains.

So what does China need to do to move up the BPO ladder? “They will need to – and have already, to a large extent  – gain visibility and the trust and respect of Western customers,”  says Dodson.