With the changed global scenario, offshoring is undoubtedly showcasing an aggressive growth trend and some key drivers that are helping increase offshoring to China are reasons like increased Government support, backed by the huge availability of local workforce, the domestic market opportunities and last but not the least, the cost arbitrage that it provides.

With an estimated market of USD 7.7 billion, China’s R&D Offshoring market is catching up fast with India.

This one-its-kind comprehensive study on the China R&D landscape, estimates the MNC R&D Subsidiary market to be USD 6.4 billion, as opposed to a market of 5.8 billion in India . On the other hand, the total service provider landscape in China is about USD 1.3 billion as opposed to a strong market of USD 3.5 billion in India.

Bringing to light the market in China, this study highlights that China as of today is home to about 920 MNCs, who have established 1,100 R&D centers there, higher than a number of 671 MNCs in India having 780 R&D centres. Additionally, the R&D offshore outsourcing trends showcase that the market there is highly fragmented with the top 10 service providers accounting for about 28 percent of the total market share. There are more than 10,000 large to small sized offshore service providers in China providing outsourcing services.

Dwelling into specifics of talent pool and employement in China, we have learned that the total installed base of talent pool with Chinese service providers today is 39,000, while there are about 130,000 personnel engaged in R&D activities across 1,100 MNC subsidiary centres there.

MNCs based out of the US & Europe are the biggest R&D investors in China till date, whereas cities like Shanghai & Beijing collectively account for more than half of the R&D establishment. These global firms have established large R&D centres in China with 53 per cent of them having more than 150 R&D personnel at these centres.

There is a definite desire among China centers to grow fast and the leadership teams at these centers have been aggressively in touch with their headquarters to get more work, both in terms of quality and quantity. India centers in due course of time are most likely to face tough competition from their China counterparts and hence it’s time for us to look into matters that can strengthen the R&D landscape in India.

Even though India centers are much ahead on the overall maturity curve, with all requisite processes in place and better talent; the pace at which China's R&D Landscape is growing surely commands for all India centers to strive harder, innovate better and move up the value chain.

Last but not the least, both India and China account for about 10 to 15 percent of the total R&D for most of the companies and the hence future will witness more work being offshored to both these locations.

Learn more about the market of Research and Development in China and that of subsidiary companies.

Read detailed insights on China's complete R&D landscape, key challenges, various government initiatives that they have taken and the road ahead.

Snapshot of a report on China's MNC R&D subsidiary landscape

Snippets of a study on the R&D Service Provider Landscape in China

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