China is known to simply overwhelm the competition. No wonder the Indian companies are sweating over the Chinese threat in every business sphere. The latest bout of concern is being experienced by Indian IT companies over one of their biggest achievements till date — business process outsourcing or provision of BPO services.

Looking at how the Chinese are obsessed with learning to speak English these days, Indian IT companies fear that their dominance in BPO services could be a thing of the past. In fact, around two months back, Wipro chief Azim Premji had openly said that China will become a major threat to India in the BPO services space.

That could be true in the long run. But in the short term, China may not be such a threat to the fledgling Indian IT companies. The major impediment is the poor quality of English. According to Chinese government sources, less than 0.05% of China’s population can speak English. And it will take at least two decades for the number to inch up. Even among those who speak the language, a mere 10-20% can converse fluently.

The Chinese government is doing its best to promote English literacy in the country. There are plans to introduce English as a second subject in most primary schools. At present, it is just an optional subject.

However, with a huge workload in schools, the move has very few takers. Outside the schools, a lot of the young college-going population is now obsessed with learning English, primarily to get jobs as volunteers for the Beijing ‘08 Olympics. The lesser number of English-speaking professionals deter companies from shifting their call centres to China. As such, finding them and recruiting them is a tough and expensive ask.

Then again, most software applications are in Chinese. So, even if you find people who can converse in English, tech support needs to be imported. This will further build on costs. Another reason why companies are not very keen on China is the expensive real estate in metros like Shanghai and Beijing.  Compared to these places, even the metros in India seem to be a cheaper alternative. Most importantly, Chinese business houses and expats, it seems, are not yet ready to take the risk of investing in BPO start-ups.

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