BT to create China R & D hubs.

BT will stake a claim to China's brightest software development talent when it unveils plans for new research and technology hubs in two of the country's most important economic centres. It is also setting up a technology and service centre in Dalian in the north east of China which will provide software development and support services to the group's customers across Asia. The announcement will underscore the growing importance of China as a key location for R & D for many of the world's top companies. The NOA says: The news that BT is offshoring such a sensitive function as research and development (R & D) to China may come as a surprise in some circles. China is not renowned for its adherence to data protection and IP legislation. However, for a company the size of BT to offshore R & D to China signifies that the government is cracking down on companies which flout data laws and is ready to enforce an acceptance of international data standards. This move also signifies that China is moving up the value chain by providing high end functions such as research and development. Traditionally China has provided lower level outsourcing services such as desktop support. The provision of high and low end outsourcing services means China is starting to compete on the same territory as India. Can China ever really achieve what India has in the outsourcing space? Unlike India, China has significant language and cultural barriers. China has also had some very bad press, for example, the Mattel fiasco whereby millions of pounds worth of children's toys had to be recalled due to the use of lead based paint. But China does have the economic clout, the sheer scale and the ability to compete on cost which will continue to make it a force to be reckoned with in the global outsourcing market. Moreover, the market that China increasingly represents is an opportunity for all global players and gives a strong incentive for a continental presence.