A story from Shanghai Daily discusses China's efforts to boost its outsourcing business through tax incentives.  Despite the economic downturn, China continues to move agressively to remain attractive to US and European firms looking to outsource IT, BPO and KPO functions.  China has identified 21 cities that are exempt from taxes for companies setting up outsourcing operations.

An excerpt from the article:

OFFSHORE service outsourcing companies in 21 cities will be exempted from business tax effective through the end of 2013 as part of China's efforts to boost the offshore outsourcing business.

Revenues from information technology outsourcing (ITO), business process outsourcing (BPO) and knowledge process outsourcing (KPO) are eligible for the policy, effective from July 1. Firms registered in Shanghai, Beijing, Shenzhen, Guangzhou and 17 other cities can enjoy the tax break, the Ministry of Finance said yesterday.

You can read more here: Outsourcing firms get tax break