A Theoretical Study Of International Service Outsourcing Based On Trade Equilibrium

International Service Outsourcing has become one of the major driving forces of economic globalization, and has widely applied to the IT industry, finance&insurance, R&D and other specialized technical service sectors. According to "2008Global Outsourcing Development Report", the global service outsourcing market size in2005reached6,000billion, reached860billion U.S. dollars in2006, and1.2trillion U.S. dollars in2007. UNCTAD predicted that the next few years, global service outsourcing market will grow at a rate of30-40%annually. At present, many developing countries have undertaken trade in services offshoring as a national strategic focus of foreign trade development, developed a large number of developing offshore outsourcing policy. For now, the Employer of international service outsourcing mainly in the United States, Japan and the EU, accounted for the Global International service outsourcing over85%of the market. From the employee side, India gets an absolute dominant position, attracts about half of the international service outsourcing business in the world, and in the global five hundred companies, more than four hundred companies established in India to embark offshore service outsourcing business. Others are Ireland, Hungary, China, Russia and the Philippines and other countries are also actively participating in international service outsourcing market, and their market share is increasing every year. As the largest developing country, China is in a stage of economic upgrading industrial structure, and international service outsourcing which is in line with requirements of China’s current economic development, is an effective way to upgrade the industrial structure in China, so the international service outsourcing has become an important research academic subject.This article is just based on the background of rapid development of international service outsourcing market,and try to explain the economic phenomenon of international service outsourcing from the theoretical aspect. Innovation of this paper is to study international outsourcing of this economic phenomenon from the perspective of international trade. At present, Academic circles at home and abroad have studied outsourcing from different perspectives which can be divided into micro-enterprise and macro-economic perspective view the two major categories. However, studies from the perspective of trade theory literature outsourcing is very rare. Although in the early80s of last century, some scholars had applied the theory of comparative advantage of trade in services, but in many studies, the theory of comparative advantage was just as a basis for outsourcing services, few scholars have explored in depth. The modern analytical method is to make extensive use of mathematical theory to make quantitative analysis of international trade issues, so as to more accurately describe the trajectory of economic operation.This paper is divided into the following sections to discuss:The first chapter is about the theoretical foundation and international service outsourcing research. This section is the main theoretical basis of this article, and describes the absolute advantage trade theory, trade theory of comparative advantage and the development of trade theory of comparative advantage. The third part, the development of trade theory of comparative advantage, is the theoretical core of this paper, and introduces John Stuart Mill’s "doctrine of mutual needs ", Alfred Marshall’s offer curve analysis and Fei Lanke Taussig’s improvements of comparative advantage in a series of assumptions. And then analysis of the current research on international service outsourcing situation.The second chapter is about the general analysis of international service outsourcing. This part is divided into three parts to analyze. The first part is about the definition of international service outsourcing, the paper thinks that if you want to deeply understand the concept of international service outsourcing, it must break it into parts to understand, therefore, this part orderly analyzes the concept of service, service outsourcing and international service outsourcing, then in order to have further understanding of the concept of outsourcing, paper compares service outsourcing with some similar concepts.The second part analyzes the current development and characteristics of international service outsourcing. The international service outsourcing market is developing very rapidly, the area involved is expanding and industry competition is gradually increasing. The third part is the development of international service outsourcing trend analysis. Paper thinks that the current international service outsourcing is mainly characterized by three distinct trends, namely outsourcing base is diversified, progressive type of high-end outsourcing business,"reverse outsourcing" model is gradually on the rise.The third chapter is the trade equilibrium of international service outsourcing research, which is the focus of this study. Paper analyzes the balanced development of international service outsourcing theory by using four types of modern quantitative analysis of international service outsourcing, namely the trade offer curve analysis, the increasing of labor cost assume, the social welfare effects and multi-countey and multi-commodity trade model.The fourth chapter is the development of international service outsourcing analysis. First introduces China’s current situation of international service outsourcing. China as countries undertake international service outsourcing, the service outsourcing market is not mature for the relatively late start, and now most of Outsourcing of services are the more low-end value chain for service sectors, but the broad market space for development, adequate allocation of resources, rapid development of science and technology level, strong government policy support, China’s international service outsourcing development prospects will be bright. Then based on the current situation of China’s economic development and resource allocation condition, paper thinks that China currently has several major factors restricting China’s international service outsourcing market sustainable development, namely the low level of service skills, weak strength of a single service outsourcing enterprises, lack of language capacity and so on. Finally, makes three practical suggestions according to the above constraints, that enhance staff training and improve service quality; encourage enterprises to expand and focus on brand building; improve and employ foreign language skills.The fifth chapter is conclusion of this study. After the above analysis, we draw the following conclusions:Conclusion one:from the international service outsourcing employees side, they have a comparative advantage in the production of cheap labor,so through undertaking service outsourcing they can play the advantages of the labor factor to improve Their terms of trade, increase their employment levels,, promote the rise in spending power, narrow the gap with the developed countries and import capital/technology-intensive products to enhance the country’s industrial structure and enhance international competitiveness. Conclusion two:the Employer of outsourcing services outsourcing can reduce the average labor costs to promote their education and training, upgrade their labor force structure, dedicate to the high capital, high-tech products investment and utilization of the industrial structure in the world to the forefront in an invincible position in international competition. Conclusion three:the way outsourcing labor costs may be different based on the choice of full and partial outsourcing services outsourcing and the result of outsourcing will lead to the wage levels between the two countries gradually converge.Innovation of this paper is to study international outsourcing of this economic phenomenon from the perspective of international trade.Although in the early80s of last century, some scholars had applied the theory of comparative advantage of trade in services, but in many studies, the theory of comparative advantage was just as a basis for outsourcing services, few scholars have explored in depth. The modern analytical method is to make extensive use of mathematical theory to make quantitative analysis of international trade issues, so as to more accurately describe the trajectory of economic operation. Paper analyzes the balanced development of international service outsourcing theory by using four types of modern quantitative analysis of international service outsourcing, namely the trade offer curve analysis, the increasing of labor cost assume, the social welfare effects and multi-countey and multi-commodity trade model.The inadequacy of paper lies in the following aspects:first, lack of professional statistical data for support, as currently there is no professional organization or government department to provide comparetive detailed statistical data of international service outsourcing, paper only from the whole size of transactions of the international service outsourcing market to determine the status and trends of market development, second, several models involved in paper are all built on a series of assumptions, so the interpretation of some special economic phenomena still has some limitations, such as paper does not study in depth When a country is both a employer and employee of the market, but it is a common phenomenon; Third, in multi-country and multi-commodity trade model, for the limited capacity, paper has to divide it into two cases to analyze, namely a number of countries and the two commodities and two countries and a number of commodities. while N countries and N commodities trade model will be studied in future.