World Bank 'Ease Of Doing Business' Report On Offshore Outsourcing Destinations

One of the primary business drivers for China-based outsourcing providers has been the huge domestic market potential that attracts investment from multi-national corporations (MNCs). Relationship-savvy MNCs quickly learn that to do business in China, it makes sense to consider partnering with a China-based provider.  After all, why in the world would an MNC doing business in China ask their current providers based in an entirely different region of the world to service them in China?  Although there may be good reasons, strategic consideration needs to be given.

Helping MNCs assess the overall ease and risks of doing business in China with a local China-based service provider, the World Bank has published comprehensive DOING BUSINESS research. From their website:

"Economies are ranked on their ease of doing business, from 1 – 183. A high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm. This index averages the country's percentile rankings on 10 topics, made up of a variety of indicators, giving equal weight to each topic."

One of the 10 topics/criteria is Enforcing Contracts, which is a critical measurement of the risk involved with doing business offshore. The table below show how the popular offshore outsourcing destinations stack up to each with regard to overall ease of doing business and contract enforcement:

Source: The World Bank, Ease of Doing Business Report, 2011

We can see from the table that China compares favorably with other offshore destinations on contract enforcement. And perhaps counter-intuitively, also surpasses most countries in the developed world.