BEIJING, March 11 (Xinhua) -- As general manager of a service outsourcing company, Hu Bo has been plagued by mixed emotions recently.

On one hand, he is happy with business expansion as more foreign companies offered Web site maintenance contracts to Hu's Beijing-based Internet Engine Corporation; while on the other, he's frustrated by the fact that his company doesn't have enough hands to handle the booming overseas business.

He said it was difficult at the beginning to look for overseas contracts when he founded the company in 2006.

"I had to travel to Hong Kong several times for one 10,000 U.S. dollar contract at that time," Hu said.

Now, he is being contacted directly by U.S. or European companies.

Recent years saw a great development of China's service outsourcing industry. In the first eight months of last year, the country's outsourcing contracts hit 1.9 billion U.S. dollars, up 17 percent over the same period of 2007.

Wang Chao, Ministry of Commerce assistant minister said that more multinational companies were keen to outsource non-core business to other companies to reduce costs and enhance competence amid the global financial crisis.

This brought Chinese companies business opportunities. The Chinese government takes it as a new growth engine during the global economic downturn, as well as a good answer to solve the employment difficulties of the country's more than six million college graduates this year.

In his government work report to the National People's Congress on March 5, Chinese Premier Wen Jiabao listed "to develop international service outsourcing" as one of the seven ways to keep a steady growth of foreign trade.

Employers in this sector have felt an obvious talent shortage, which may hinder the development.

Hu Bo said a British vocational training institution asked the Internet Engine to redesign its Web site last year. The project manager presented the client with a thorough plan after month-long research, but the client was not satisfied.

"What they expected to see in the plan was detailed design, for example, where the company's logo should be put on the homepage, while our Chinese manager's way of thinking was too abstract for them," he said.

Hu almost lost the client before he finally managed to find another manager who had been working in the Silicon Valley for several years to take over the project.

"Of course, I have to pay much more to him," Hu said.

At the end of last year, he planned to hire more people to develop the overseas market, which demanded "foreign language fluency, basic IT skills and experience or knowledge of marketing."

"It turned out finding such kind of 'compound' talents was nearly a mission impossible," Hu said.

McKinsey, the New York based consultancy, said in a report in January that China posted rapid growth in the business but lagged behind India, whose market value was nine times that of China.

The talent shortage, especially a lack of management and developers with relevant experience, may become the key factor, among others, to hinder the expansion of the country's offshore outsourcing industry.

Zhang Zhongyang, vice president of the Wuxi iSoftStone Corporation, a subsidiary company of one of China's top 50 service outsourcing companies, shared the same view.

The company, based in Wuxi City of east China's Jiangsu Province, deals with bank business process outsourcing (BPO) and IT outsourcing (ITO). Its major clients were in Japan and the Republic of Korea.

That's why an operator's position may require mid-level Japanese or Korean, which means the employee can read manuals and other documents in Japanese or Korean, and two or three computer software development tools, for example, Java.

It's almost impossible for the fresh college graduates to be qualified, Zhang said.

"So we will pick those who have a good studying attitude and ability," Zhang said.

Then, the company will spend six months in language and skills training, after which it will still take two- to- three years for the new employees to be familiar with the process through hands-on training, according to Zhang.

Zhang said marketing personnel are the most difficult to find.

"Besides all the requirements mentioned above, they have to have client resources," he said.

He said that almost all the management-level workers of the service outsourcing companies have overseas study or work experience, which will help them to get overseas clients.

"Such kind of talent you may get by chance, but not effort," he said.

His company has been thinking of developing a European and American market, but not taking into account until it got proper market developing people this year.

Zhang said the company would increase its annual turnover from last year's 10 million U.S. dollars to this year's 20 million, and would therefore, have to employ 1,000 more people this year.

Local government's policy offered a helping hand.

The company joined a nationwide job fair tour organized by the Wuxi municipal government for some 100 local service outsourcing companies to find potential employees, which started in February.

They would travel to major cities, including Beijing, Shanghai, Nanjing, and Wuhan to recruit qualified workforce, according to the Wuxi Foreign Trade and Economic Cooperation Bureau.

Zhang said although his company recruited people through the Internet or other job fairs, taking part in the group activity will enhance the reputation of the company in order to attract more talent.

"Some excellent college graduates still have little understanding on service outsourcing companies. If they see we are supported by the government, they will trust us more," he said.

Measures to bolster the outsourcing industry were announced early February by the Chinese government.

The document said that 20 cities, including Beijing, Shanghai, Xi'an, Suzhou and Hangzhou, have been designated for pilot service outsourcing programs. Beginning Jan. 1, these companies are eligible for tax breaks, financial support, subsidies and intellectual property rights protection.

The Ministry of Commerce and the Ministry of Education will work out policies on service outsourcing talents, training 1.2 million people in coming five years and helping them to find proper jobs.

The government will offer service outsourcing companies a subsidy of up to 4,500 yuan (662 U.S. dollars) a year for every college graduate employed on a contract of at least one year.

Wuxi, which is also selected as a pilot city, will allocate an extra of 8,500 yuan per person each year as training subsidy for outsourcing companies, the bureau said.

"Altogether we can get a 13,000 yuan training subsidy for each graduate we recruit, which can almost cover the training cost," Zhang Zhongyang said.

Statistics show, world cross-border service and software outsourcing business volume hit 400 billion U.S. dollars in 2007. The figure is expected to hit 1.6 trillion U.S. dollars by 2010.

Zhang said that the government has made great efforts to support the industry.

"We have to seize the chance," he said.