China Law Blog

Sadly, the most common way to make up for a bad business plan, bad execution or bad research is to outsource to China and blame high labor costs/lack of talent in the US.

nanheyangrouchuan --

I have no doubt that goes on, but I must say I have yet to see it.

Hm, I made it about 3/4 of the way through the recording, but it was super introductory...who knew that you could outsource engineering to China and save big bucks?

It's weird because IT conversations is usually outstanding.

Though they didn't talk about it, my sense is that biotech outsourcing is better suited to China than software outsourcing, since it's closer to hardware engineering/manufacturing. It has well defined, repeatable processes, the processes can be monitored, and the outputs can be objectively measured. Software engineering is much less of a science, and it's much harder to ensure quality.

Dan --

Thanks for checking in. Sorry it was so introductory. Guess you already knew companies outsource to China. I have to say I am not a big fan of podcasting. I prefer being able to just read it. It's faster.

You make some interesting points re biotech in China. Singapore is becoming a hot place for biotech. Not as cheap as China, but better IP protection.

It's pretty introductory but the talk is good because it's sound advice: select what you move to China, what China does good, what to look out for and how they are doing it.

I agree with Dan on software vs biotech outsourcing to China. China would do much better with biotech. However, my view on China's software outsourcing is that the industry is too young. Computer science wasn't a major in China until late 80s while medicine has been practice for a long time. There are few working Chinese software developers in their 30s. If they don't make project managers by late 20s, smart programmers change fields. Software engineering can be done objectively but China just don't have enough talents to do it well.

Mr. Li --

You are in the software business, so I defer.

Aside from Dr. Glenn Rice's Bridge Pharmaceutical, the other big one in biosciences outsourcing is Wuxi Pharamatech. You can check out an article I wrote on them back in 2005 for Red Herring somewhere; it wasn't bylined, but look up Wuxi Pharamtech on the RH website and you'll find it. At that point they had something like 8 out of 10 of the biggest biopharma companies as clients, and they get rave reviews, doing basic compound screening and chemsitry. Good company.

How is outsourcing biotech to china any better than working with an established Indian MNC like Dr. Reddy?

KK --

Thanks for checking in and thanks for the suggested link. Unfortunately, looks like one has to become a member to view.

nanheyangrouchuan

Dunno. I'm guessing it's like anything else. China has some good people and India has some good people and there is a shortage. Of course, there is always the cost issue.

"How is outsourcing biotech to china any better than working with an established Indian MNC like Dr. Reddy?"

The podcast actually discussed about this as well as cost comparison to doing it in Silicon Valley vs Oklahoma. ;) India is good for some thing and China is good for others. Biotech is such a big field, no country can actually be good at all of them and at good cost.