COUNTING ON MAINLAND-TAIWAN TIES: Staff members from the Newland Group based in Fuzhou, Fujian Province, check digital products inside a workshop. The company is the first from the mainland to invest in Taiwan (ZHANG GUOJUN)

Fuzhou, a bustling city along the Taiwan Straits in Fujian Province, is witnessing rapid growth in its service outsourcing sector, which covers software development, animation and online gaming as well as telecommunication services and logistics.

The Newland Group is a private hi-tech company that offers all-round IT solutions to clients. Based in Fuzhou, capital of southeast China's Fujian Province, and boasting total net assets of over 700 million yuan ($114.31 million), Newland made its name as an IT outsourcing service provider.

Newland is only one of the Chinese companies that are looking to get in on the lucrative and booming market. Service outsourcing is on the rise in China as the country seeks to abandon its global image as a producer of low-end manufactured goods. The Chinese mainland has become the world's second largest service outsourcing provider after India.

Chinese companies took service-outsourcing orders of $11.7 billion in the first quarter, up 43.6 percent year on year, according to the Ministry of Commerce (MOFCOM). As of March, China's service outsourcing industry had 4.46 million employees. Orders of offshore service outsourcing increased to $33.6 billion in 2012, compared with $4.69 billion in 2008, a global market share of 27.7 percent, up from 7.7 percent in 2008.

Service outsourcing covers a wide-range of company needs from call centers, IT solutions, information storage and cloud computing. Previously, only companies were involved in service outsourcing, but now governments and financial institutions are willing to outsource service jobs as well.

"Fuzhou has many advantages to develop into a service outsourcing hub," said Chen Ye, Vice Mayor of the city, at the China Fuzhou International Outsourcing Forum, a sideline of the Cross-Straits Fair for Economy and Trade held on May 18. "The most important advantage would be its geographic proximity to Taiwan. As the closest provincial capital to Taiwan, Fuzhou has the most preferential policies for mainland-Taiwan cooperation."

In recent years, Fuzhou's service outsourcing industry enjoyed two-digit growth. At the end of 2012, the city had a total of 585 service outsourcing companies, which took offshore outsourcing orders worth $506 million, surging 45 percent over the previous year, and onshore outsourcing orders worth 38.6 billion yuan ($6.2 billion), up 33 percent year on year, according to a statement from the Fuzhou Municipal Government.

Fuzhou is hoping Taiwan will play a crucial role in the city's outsourcing development, given the island's advanced hi-tech expertise and head start in service outsourcing. Companies based in the city are hoping Taiwanese companies can help service providers attract global contracts.

"The city boasts a significant number of rapidly growing software companies, strong infrastructure and a vast potential market, while Taiwan has solid experience in the international sphere and mature business processes and commercial models. The two highly complementary regions should have deeper cooperation in the service outsourcing industry and together explore the international market."

Wan Lianpo, Deputy Director of the Department of Trade in Services and Commercial Services, echoed Chen's viewpoint, adding that cultural similarities between Taiwan and Fujian make it easier for the two to cooperate. "Fuzhou has a good natural environment and abundant human resources, making the city a promising one in developing the service outsourcing industry," Wan said.

Taiwan has a very advanced service industry, which accounts for 70 percent of its GDP, and also has global brand influence in the IT industry. If two regions can enhance cooperation to complement each other, it will be greatly beneficial for both sides, Wan said.