Each of these cities will annually receive a sum of 5 million yuan between 2010 and 2012 from the government to consolidate their outsourced service platforms.

Buoyed by the growth prospects and government support, many big multinational companies are now turning to China for outsourcing. Big marquee names like IBM, Microsoft, Hewlett-Packard and UBS have been in China for several years and all are busily adding staff for their outsourcing operations.

Nothing personifies China's growing prowess more than the fact that Indian companies are now setting up BPO units in China for their clients.

India's leading information technology and outsourcing company Tata Consultancy Services (TCS), has a BPO unit in Hangzhou, the capital city of Zhejiang province. Other IT majors like Infosys and Wipro have presence in cities like Shanghai and Beijing.

Not surprisingly most of the companies are also planning to ramp up their workforce in the next few years. According to report in The Economist, Indian companies plan to increase their headcount in China from a few hundred to 5,000-6,000 each in the next few years.

Genpact, a BPO company in which industrial conglomerate General Electric holds a 33 percent stake, has doubled its staff intake to around 2,900 from 1,800 in Dalian, Liaoning province.

Mika Niemi, president of a Finnish company that specializes in food safety technology, recently invested some 30 million yuan in Xi'an for a BPO venture.

Niemi attributes the boom in China's outsourced business to its superior infrastructure, consistent tax breaks and strong support from the government.