The Chinese government is to promote the outsourcing industry with the aim of making the country an international base for outsourcing, said a senior official with the Ministry of Commerce (MOC) on Thursday.

"Development of the outsourcing industry is an important way to improve the quality of China's foreign trade and upgrade the structure of foreign investment in China," said Ma Xiuhong, Vice Minister of Commerce, at the third Session of International Investment Promotion Forum.

The MOC would allocate funds to train outsourcing workers and urge the State Development Bank to establish loans to support the industry, said Li Zhiqun, director of the MOC's Foreign Investment Administration Department.

The ministry would also invest up to 100 million yuan (US$12.5 million) a year in building ten bases across the country and in 1,000 companies to undertake outsourced services in the next three to five years.

Li said the government would draw up regulations on personal information protection to enhance intellectual property rights in the industry.

Outsourcing generally includes the transfer of certain business process services, such as software development and financial services, to other companies, in order to reduce costs and enhance competitiveness.

However, outsourcing is still a young industry in China. Service trade accounted for 10.9 percent of China's total foreign trade volume in 2005, far lower than the average level of 19 percent worldwide.

The forum was held Wednesday and Thursday in Chengdu, southwest China's Sichuan Province. Sponsored by the MOC, it drew more than 400 people from international investment promotion agencies and multinationals.

(Xinhua News Agency July 28, 2006)