National Policies
On September 23, 2009, nine ministries and commissions including Ministry of Commerce, National Development and Reform Commission, Ministry of Science and Technology, Ministry of Industry and Information Technology, and Ministry of Commerce jointly published the Guidelines on Encouraging Government Authorities and Enterprises to Outsource in an Effort to Promote the Outsourcing Industry ([2009] No. 200).
• Focus will be put on encouraging government authorities and enterprises to outsource; government purchase will include outsourcing of non-secret business including information technology solution, operation maintenance, software development and disposition, testing, data processing, system integration, training and leasing, to continuously expand purchase range in the future.
• Norms for organizations that outsource and service standards for outsourcing service providers will be formulated; an evaluation system for outsourcing service providers will be established; government authorities and medium and large-sized enterprises should single out their IT and information services in an attempt to cooperate with professional outsourcing service providers in various forms; more platforms should be set up for the communication between outsourcing demands and outsourcing service providers based on the existing public support platform for software and information outsourcing.
On September 7, 2009, People’s Bank of China, Ministry of Commerce, Banking Regulatory Commission, Insurance Regulatory Commission, and State Administration of Foreign Exchange co-published Suggestions over Offering Financial Support to Facilitate the Development of the Outsourcing Industry ([2009] No. 284).
Support from the Banking Industry:
Efforts will be made to actively develop new credit products that suit characteristics of the outsourcing industry and promote the formation of a multi-level credit system that is outsourcing industry friendly; credit support for supplementary services of the outsourcing industry will be expanded; financial products and services innovation will be conducted in some pilot cities.
Support from the Securities Industry:
Assistance will be provided for eligible companies in being listed domestically; lending and financing products will be adopted to support the development of outsourcing companies; community funds will be encouraged to invest in the outsourcing industry in means of share holding or capital lending.
Support from the Insurance Industry:
Measures for the perfection of export credit insurance policy will be adopted; new insurance products will be created; export payment and debt collection services, as well as convenient business financing services will be provided for outsourcing service providers; efforts will be made to accelerate the development of intellectual property infringement insurance, employee loyalty insurance, product obligation insurance, and product quality insurance.
Foreign Exchange Support:
Efforts will be made to reduce risks posed by foreign exchanges so as to encourage the use of Chinese Yuan as settlement currency among outsourcing service providers in developing offshore outsourcing business; verification procedures of foreign currencies transactions will be simplified; preferential policies on account opening and funds transaction will be formulated for offshore outsourcing service providers.
On October 12, 2009, Ministry of Human Resources and Social Security and Ministry of Commence co-issued a document entitled Several Opinions with Regard to Accelerating the Development of Outsourcing Industry and Promoting Employment of College Graduates ([2009] No. 123)
• Efforts will be made to adjust the structure of outsourcing talents training, improve the quality of outsourcing talents training institutions and enhance the employability of people working in the outsourcing field, with an attempt to cultivate 1.2 million outsourcing talents as well as create 1.25 million new jobs (including 1 million jobs for college graduates) within 5 years and win a 30 billion dollars worth of international outsourcing contracts in 2013.
On November 6, 2009, General Administration of Customs and Ministry of Commerce co-issued the Notice on Carrying out Pilot Supervision on Protective Tariff for Imports of International Outsourcing Business.
• Pilot supervision on protective tariff for imports of international outsourcing business will be carried out in ten cities, which are Shanghai, Dalian, Shenzhen, Nanjing, Suzhou, Wuxi, Harbin, Daqing, Xi’an and Changsha.
Local Policies
Beijing: Provisional Measures on Managing Outsourcing Counterpart Funds; Specific Rules for the Implementation of Provinsional Measures on Managing Outsourcing Counterpart Funds
• Outsourcing enterprises will be encouraged to set up overseas branches to undertake international outsourcing business. Each eligible company will receive a maximum RMB300 thousand subsidy.
• Enterprises that have expense on equipment purchase for public platforms approved by Beijing Municipal Commission of Commence and Finance Bureau of Beijing will be reimbursed with 50% of the expense, with the total sum not exceeding RMB2 million; enterprises that have expense on public platforms maintenance will be reimbursed with 50% of the annual actual costs, with the total amount not exceeding RMB500 thousand.
• Any leading outsourcing enterprise that rents office to carry out offshoring business will get a maximum allowance of RMB20 per square meter per month, with the annual subsidy not exceeding RMB3 million; those with over 15,000-square-meter self-built or purchased offices will be reimbursed with 50% of the interests charged on loans. The subsiding period should not be longer than three years, and the total amount should not exceed RMB5 million.
• Technical advanced outsourcing enterprises can receive 20% of the expenditure on research and development carried out to improve technical and service delivery competencies, with the total amount not exceeding RMB1 million.
• Enterprises with employees that have been granted with special funds for training from the central government will receive counterpart funds of at most RMB2 thousand for the training of each employee.
• A one-off bonus of RMB5 thousand, RMB150 thousand and RMB500 thousand will be given respectively to training institutions respectively with more than 100, 200, and 500 employees who have been granted special funds for training from the central government.
• Every enterprise that offers living or internship subsidies to students from Beijing-based colleges who have internships in accredited training centers for over three months will get a at most RMB500 monthly allowance for every student, with the total subsidy period not longer than 6 months.
• Authorities of outsourcing model districts should provide eligible outsourcing enterprises that haven’t received special funds for talents training from the central government with training allowances of no more than RMB3,000 for each new employee.
Tianjin: The Notice on Accrediting Technical Advanced Outsourcing Enterprieses in High-tech District; The Notice on Accrediting Animation Enterprises in High-tech District
• An incentive of RMB3-5 million will be offered to any enterprise or organization set up by Global Top 500 and Top 100 in China’s software industry.
• Every enterprise or organization that purchases office in the third development phrase of the Software Park will be reimbursed with a maximum of RMB1, 000 per square meter, with the total subsidized area not exceeding 2,000 square meters.
• Every enterprises or organization that rents office in the High-tech District will be granted with an allowance of RMB20 per square meter for rented area below 1, 000 square meters, and RMB10 per square meter for rented area above 1, 000 square meters, with a maximum subsidized rental period of three years.
• Every accredited training institution will get a subsidy of RMB500 monthly for each trainee, with a maximum period of 6 months.
• Every accredited enterprise or organization will get a subsidy of no more than RMB4, 500 for the training of every new employee with junior college degree or above.
• Every eligible software and outsourcing training institution that offers services to enterprises or organizations in the High-tech District will get a maximum of RMB500 training allowance for every trainee.
• Every senior talent in accredited enterprises or organizations can receive a certain portion of his/her income tax as a bonus when he/she has worked for over a year in his/her enterprise, with the amount not exceeding RMB 300 thousand.
• Every accredited enterprise or organization listed overseas can get a bonus of at most RMB2 million.
• Every accredited enterprise or organization can get a subsidy regarding its expenditure on international lines, with the annual amount not exceeding RMB500 thousand.
• Every accredited enterprise or organization that applies for working capital loans from financial institutions through the loan guarantee platform of High-tech District will get an interest subsidy of at most RMB1 million for each project.
Hangzhou: On September 23, 2009, Hangzhou Municipal People’s Government published Regulations on Intellectual Property Protection in Hangzhou’s Outsourcing Industry.
• The government will offer rewards to outsourcing enterprises that make outstanding contribution to intellectual property management system improvement and intellectual property protection. Besides, it will appoint eligible outsourcing enterprises as intellectual property protection model enterprises and offer them tailored support.
• The government will encourage outsourcing enterprises to obtain independent intellectual property rights, providing financial support to enterprises that have acquired patents and other kinds of intellectual property rights and enterprises that have realized the industrialization of technological achievements. It will also include intellectual property projects that have generated outstanding economic profit or social impact into incentive reward scheme.
• To encourage outsourcing enterprises to conduct branding strategy, the government will bring eligible outsourcing enterprises that are developing their own brands and fostering export brands into the coverage of preferential policies mapped out by the Foreign Trade Development Fund.
Jiangsu Province: Notice on the Publication of Jiangsu Technical Advanced Outsourcing Enterprises Accreditation Guidelines ([2009] No.214)
Changsha: Implementation Plan on Changsha Intellectual Property Strategy
Anhui Province: Notice on the Publication of Anhui Technical Advanced Outsourcing Enterprises Accreditation Guidelines (for Temporary Implementation) ([2009] No. 130).
(Reproduced from "ChinaSourcing" magazine)
