China getting some offshoring buzz

China is to manufacturing as India is to IT services, if taken into the context of outsourcing.

But with salaries of Indian workers getting higher and higher, even China is now getting mindshare in offshore outsourcing.

According to a CNET article, wage inflation in places like Bangalore, Chennai and Kolkata are forcing some companies to look for offshore alternatives.

Indian companies scored the highest in terms of wage increases (12% to 14%) in a recent survey of more than 500 comapnies in Asia-Pacific. Indian workers get higher salary increases than those in the US itself.

Though its still too early to tell, China is generating interest even among Indian companies themselves.

Tata Consultancy Services, one of the top Indian outsourcing companies, has started to outsource to India, looking to hire at least 3,000 software engineers in China or 15% of its projected global workforce.

Universities in China and India award more award more bachelor's degrees in engineering than equivalent schools in the US.

But recently, China's wage growth rate for technology workers was just half as much as India's, according to a study.

Still, industry analysts and Indian executives alike are positive that India is years ahead of other countries, most definitely including China, in the offshore business.

In terms of technology standards alone, India has the most number of CMM-certified companies, even more than the total of those in other countries in the region.

Just recently, America Online announced it is opening up offices in Bangalore and has begun hiring software engineers. AOL follows a list of companies like GE, Yahoo and Google which have opened research offices in India.

India is also way more advanced in terms of doing business - sharing a common language with US companies and Western-like entrepreneurialism. Indian technology companies even offer stock options.