Today, Beijing-based VanceInfo Technologies lists on the New York Stock Exchange, becoming the first Chinese outsourcing company to float in the United States.
Sophia Wong, head of marketing at VanceInfo competitor Beyondsoft, said her company had entered the 'quiet period' that bans it from promoting itself before filing for a US listing. A third Beijing firm called hiSoft also plans to go public some time next year.
Five years after consultancies such as Gartner started hyping China as the next big thing in outsourcing, it is tempting to conclude the industry will soon rival India as a purveyor of IT services to the developed world. In reality, it may be some time before that happens.
China has a niche writing software for Japan and other East Asian nations, and strong growth can be expected at home, yet it is in no position to go head-to-head with India in the big markets of the US and Europe.
According to figures from the Indian National Association of Software Companies and the mainland's Ministry of Foreign Commerce, the turnover of China's IT outsourcing industry was US$2 billion in the year to March, a fraction of India's US$18 billion.
Zhu Ziqi of the Beijing Association of Sourcing Services said that less than 20 per cent of the country's outsourcing goes to the US or Europe.
Wage inflation in India's IT sector was always supposed to be China's opportunity. Nevertheless, basic salaries in 'tier one' mainland cities are still the same or even higher than in Bangalore, although 'tier two' cities such as Xian and Hangzhou may be 20 per cent cheaper.
