China still safe for tech outsourcing: Vendor

China is still a safe place for foreign businesses to obtain outsourced information technology labour despite growing concerns over alleged state-sponsored cyber espionage, according to one of the country’s largest technology outsourcing vendors.

Reports of cybercrime rings operations being traced back to China-based servers and accusations of intellectual property piracy has long been linked to the country.

However, the recent increase in media reports of China’s links to cyber espionage activities should not be associated with the country’s IT outsourcing industry, according to Jun Su, corporate executive VP of Pactera Technology.

In a recent interview with Computerworld, Su characterized security as a “live or die thing” for his company.

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“We are a public company, if we ever got exposed to leaking IP, we are dead,” he said.

Tina Tang an analyst for research firm Gartner Inc. said outsourcing firms in China has been around for 15 years.

These companies, she said, have been following Western standards and she believes security will not be a problem.

Last October, Chinese telecom gear manufacturers Huawei Technologies and ZTE were accused by a U.S. congressional committee of having links to the Chinese government. The committee advised American businesses to purchase their networking equipment from other sources.

It’s important for firms like Pactera not to have the stigma of cyber espionage as well as any concerns among Western companies about security in China spill over their operation. Pactera relies heavily on business from the United States. As much as 43 per cent of its revenue last year can from U.S.-based companies with another 23 per cent from Europe and Japan-based customers. The company gets 70 per cent of its revenue from outsourcing.

The company was created out of the merger of two Chinese outsourcing vendors, HiSoft and VanceInfo which were known to have Microsoft, IBM, and General Electric among their clients.

Pactera has more than 23,000 workers and has annual revenue of $360 million.

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