Study On The Factors Influencing Competitiveness Of Service Offshoring Host Country

Service offshoring is an important form of international vertical Specialization. It is of great significance to host countries in terms of its contribution to their employment, technology advancement and industry upgrading; therefore many countries are working hard to participate in this activity. This paper aims to explore the critical factors influencing the competitiveness of the service offshoring host country, the weaknesses of China when compared to other host countries and what it will take for China to improve its competitiveness.After reviewing related economics and management theories, this paper introduces an analysis framework of seven influential factors which includes service quality, labor cost, policy, language, ICT, intellectual property protection and service openness. The empirical study indicates that the most important factor is service quality, followed by ICT and service openness. Besides, intellectual property protection and language also have certain effect on countries' ability to offer offshoring services.Based on the theoretical and empirical analysis above, this paper makes a comparison on those critical factors between China and other host countries and finds out that being short of professional human capital and competitive service vendors, lack of sound intellectual property protection and international communication skills are the weaknesses of China as a service offshoring host country. In the end, some constructive suggestions are made, from the perspective of enterprises, system, human resources and market, on how to sharpen China's competitiveness in the trend of service offshoring.