Outsourcing Software Development to China: Everything You Should Know

Outsourcing Software Development to China: Everything You Should Know

Published on
September 2, 2022
Updated on
September 26, 2022
Author
Luan Campos
Reading Time
One of the most popular outsourcing destinations is China. Widely known for its large tech talent pool and cost-effective rates, China is a natural choice for startups looking to cut costs.

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Hiring developers can be expensive. According to Glassdoor, the average U.S.-based software developer earns a whopping 97,763 USD per year. That's significantly higher than the annual mean wage of all occupations, which was 58,260 USD as of 2021.

These high rates have been pushing tech companies to outsource software development. By hiring devs from other nations, startups can cut significant costs without sacrificing performance.

One of the most popular outsourcing destinations is China. Widely known for its large tech talent pool and cost-effective rates, China is a natural choice for startups looking to cut costs. It also boasts top-notch tech hubs, including Beijing, Shenzhen, and Shanghai.

Read on to learn how to outsource software development to China. Along the way, we'll cover the benefits of outsourcing to China and average rates for hiring Chinese offshore developers. We'll also cover the downsides of Chinese offshore software development and alternative outsourcing locations.

The Benefits of Outsourcing Software Development to China

Offshore software development in China offers many advantages, including access to a large tech talent pool. Chinese software devs also offer cheap rates, making them a great fit for small companies and startups.

Large Tech Talent Pool

China is home to one of the biggest and most talented tech talent pools in the world.

Chinese government data has revealed that Chinese Big Tech employs over seven million software developers, programmers, artificial intelligence (AI) trainers, and data scientists.

What's more, this talent pool will continue to grow. According to Statista, the global developer population will reach 28.7 million by 2024, an increase of 3.2 million from 2020. Most of this growth will happen in China, where the developer growth rate is 6 percent to 8 percent heading up to 2023.

Chinese devs are incredibly talented. According to HackerRank, China would rank first overall if there were a programming Olympics. China also ranked first in the following domains:

  • Data structures
  • Mathematics
  • Functional programming

Cheap Rates

Chinese developers also offer budget-friendly rates. Salaries vary according to experience, but most Chinese devs only charge a third or a quarter of what their U.S. counterparts would charge.

Average Rates for Hiring Offshore Developers in China

As previously mentioned, China has a large share of programmers with cost-effective rates. Most junior and senior devs in China charge far less than their U.S. counterparts.

Junior Hourly Rate

A junior developer is a programmer with less than three years of working experience. They have limited experience creating, testing, deploying, and maintaining software from scratch. Due to their limited experience, they often require substantial mentorship and guidance.

According to Glassdoor, the average junior software developer in China earns 9,176 CNY (Chinese Yuan) or 1,369 USD per month. There are usually 160 work hours per month, which means that the average Chinese junior developer makes 57 CNY or 8.5 USD per hour.

In comparison, the average U.S. junior software developer makes 64,750 USD per year. Since a year has 52 weeks and each week has 40 work hours, this means the average U.S. junior dev earns 31 USD per hour.

Senior Hourly Rate

A senior developer is a programmer with over five years of experience. Unlike junior devs, they know how to create, test, deploy, and maintain software from scratch. They're also well versed in multiple programming languages, including Python, C++, and JavaScript.

The average senior software developer in China earns 409,358 CNY or 61,089 USD per year, which amounts to 197 CNY or 29 USD per hour. In contrast, the average U.S. senior software dev makes 115,944 USD per year, which amounts to 56 USD per hour.

Average Hourly Salary Rates by Tech Stack

The salaries of Chinese developers vary depending on their skills. Here's a breakdown of average Chinese hourly salary rates by tech stack:

Tech Stack Hourly Salary (CNY) Hourly Salary (USD)
Android 166 25
Avaloq 149 22
Business Intelligence (BI) 172 26
C# 178 27
C++ 170 25
Front End 141 21
Full Stack 170 25
Graphical User Interface (GUI) 142 21
Java 173 26
JavaScript 160 24
NodeJS 166 25
PHP 147 22
Python 165 25
Software Quality Assurance (QA) 154 23

How To Hire Outsourced Chinese Developers

If you want to hire outsourced Chinese developers, you need to follow certain steps. Otherwise, you won't be able to attract the best talent for your team.

Where To Find Chinese Software Development Companies

Many companies source candidates through universities and job sites, but the best way to locate FAANG-caliber talent is through Chinese software development companies.

However, that doesn't mean you should send emails to every tech company you see. Instead, you should look for candidates in tech hubs — communities that promote innovation for tech companies.

Biggest Tech Hubs in China

China has tech hubs in almost every major city.

Beijing

IT professionals in Beijing are known for their expertise in quantum computing, AI, 5G, and big data.

It's also home to China's Silicon Valley, Zhongguancun. According to Chinese government data, the total income of Zhongguancun Science Park's digital economy will exceed 6 trillion CNY or 917 billion USD by 2025.

Shenzhen

One of China's most famous tech hubs, Shenzhen is home to Chinese tech giants Tencent and Huawei. It has drafted plans to cultivate more tech "unicorns" — privately-held tech start-ups — and help them achieve public listings.

Shenzhen is also well-known for rapid technological inventions that have positively impacted the manufacturing industry. Some of the city's key development areas include AI, embedded systems, semiconductors, and hardware. Additionally, Shenzhen is home to Huaqiangbei, the largest electronics market in the world.

Hangzhou

Home to Alibaba, the world's biggest online commerce company, Hangzhou is one of China's leading tech hubs. Its top industry verticals include:

  • eCommerce
  • IT solutions
  • MedTech
  • Cloud computing
  • Digital security

Other internet giants call Hangzhou home, including:

  • Kuadi Dache: Formerly called Didi Dache and Didi Kuadi, Kuadi Dache is China's answer to Uber. It serves millions of people in over 25 cities in China.
  • NetEase: Founded in 1997 by Ding Lei, NetEase is a Chinese internet tech company that develops and maintains various mobile and online games, email services, advertising services, and eCommerce platforms.
Shanghai

Developers in Shanghai are known for their expertise in the following fields:

  • Biotech
  • Big Data
  • AI
  • Semiconductors
  • Blockchain

Shanghai is also home to one of China's premier tech parks, Zhangjiang Hi-Tech Park (ZJ Park). Located in Shanghai's busy Pudong district, ZJ Park hosts 49 regional headquarters, 13,000 small to medium-sized startups, 67 startup incubators, and 138 research and development centers. ZJ Park also has a diverse amount of disruptive technology, including biomedicine, robotics, and software.

Write a Thorough Project Description

Once you've picked a tech hub for sourcing devs, you need to create a clear and compelling project description. Talk about your company's values, what skills you're looking for, and what hires will be responsible for.

At a minimum, your job description should include the following:

  • A clear job title. Explain what the hire will be responsible for in a few words. While it's important to include as much detail as possible, don't be too descriptive. Like you, applicants have limited time and energy. A good example would be Senior C# Front-End Mobile App Developer.
  • Location. Tell applicants where your job is located. If your job is remote, just write "online" or "remote."
  • A description of your company. Include a short bio of your company. Mention key details like company culture, achievements, and awards.
  • A detailed project summary. Outline the following:
  • Core duties of the project
  • Required certifications, education, hard skills, and soft skills
  • Required job experience, skills, and qualifications
  • Preferred job experience, skills, and qualifications
  • Compensation: Talk about how much you pay and how you'll pay — for example, every two weeks through PayPal.
  • Benefits: If your company offers special perks and benefits, such as flexible hours and tuition reimbursements, mention them here.
  • Work hours: Mention how many hours the hire will be expected to work — for example, 30 hours per week, Monday to Friday.

Here's what your software development project description could look like:

Remote Senior Fullstack Software Developer — Revelo

Company Bio:

Revelo is Latin America's premier tech talent marketplace. We match FAANG-caliber Latin American programmers with startups around the world. Check out our website to learn more.

Duties:

  • Analyze client and user requirements
  • Create scalable and innovative software for clients
  • Collaborate with user interface (UI) and user experience (UX) designers, project managers, graphic artists, sales, and other developers
  • Create clear technical documentation
  • Write and test code to ensure stability and compatibility
  • Test and enhance existing features
  • Develop implementation and architecture plans with system designers
  • Integrate software components and third-party programs
  • Ensure software development targets are met on time
  • Research and implement new technologies as needed

Required Skills:

  • Over five years of programming experience and software development
  • Experience working with Perl, Linux, and shell scripts
  • Familiarity with UI frameworks and toolkits
  • Experience with databases
  • Extensive experience with Python, Java, C#, and other programming languages
  • Familiarity with Agile development methodologies, such as Kanban and Scrum
  • Experience with Object-Relational Mapping (ORM) frameworks
  • Excellent communication skills
  • An organized and disciplined approach to work
  • Advanced problem-solving skills
  • Attention to detail

Bonus Points:

  • Cloud platform and AI experience
  • Willingness to wear multiple hats
  • Experience with cryptocurrency
  • Experience with continuous integration

Compensation and Benefits:

  • Annual salary of 60,000 to 70,000 USD, depending on experience
  • Tuition reimbursement
  • Wellness program
  • Dental and health insurance
  • Flexible work schedules
  • Three weeks of paid time off
  • Parental leave
  • This is a remote position, so you can work from wherever you want.

Schedule:

  • Flexible, but preferably 8:30 a.m. to 5:30 p.m. China Standard Time
  • 35 hours a week
  • Monday to Friday

Conduct Remote Interviews to Ensure Compatibility

After posting your project description, you'll get hundreds of responses. Use an applicant tracking system (ATS) to screen for the best candidates.

Then, make a list of the most impressive candidates. You can then start conducting interviews to ensure compatibility.

Here are some questions you can ask applicants to learn more about what they can bring to the table:

  • What drew you to software development?
  • What is the most difficult part of software development?
  • What was the proudest moment in your software development career?
  • What do you like the most about working in a multi-disciplinary development team?
  • How do you spot and test bugs in an application?
  • Do you have any experience with AI and machine learning (ML)?
  • What kind of big data projects have you worked on?
  • What kind of apps and software have you worked on?
  • Which programming languages do you use?
  • What is your favorite programming language and why?
  • What is your least favorite programming language and why?
  • Which project management or software development methodologies are you familiar with?
  • Where do you see yourself in five years?
  • What is your greatest strength as a software developer? What is your greatest weakness?
  • Has your boss ever given you constructive criticism? How did you handle it?
  • Have you ever given junior devs constructive criticism? What is your approach to mentorship?
  • What would you do if a client didn't like your project?

The Downside of Using an Outsourced Development Team in China

As you can see, there are many benefits to offshore software development in China. Unfortunately, there are some downsides, including:

Enormous Time Zone Differences with the U.S.

China is 12 hours ahead of U.S. Eastern Standard Time (EST). When it's daytime in the U.S., it's nighttime in China.

Accordingly, it can be challenging to schedule real-time meetings and work on real-time projects with your Chinese programmers. Enormous time zone differences can also make it difficult for your U.S.-based staff to bond with your new hires, since they have limited time to talk to each other.

Best Talent Work for Chinese Tech Companies

Chinese tech companies pay very well. Case in point: Tencent software engineers earn 269,216 CNY or 40,175 USD per year. Given that the average cost of living in China is only 380 to 1,000 USD per month, this is quite impressive.

Because they pay so well, the best programmers in China are already working for these companies, leaving foreign companies with the "leftovers" — fresh grads who need substantial training to start building apps and programmers with limited real-world experience.

Cultural Differences

Last but not least, China is culturally distinct from the U.S. Many Chinese programmers speak fluent English, but most of them have never lived in North America. As such, they may find it difficult to bond with your U.S.-based staff.

Why You Should Pick Latin America Instead of China for Hiring Offshore Developers

If China doesn't seem like the best place to hire developers, consider hiring developers from Latin America. Unlike China, Latin American countries have a large overlap with U.S. time zones. They also provide other advantages, such as geographic proximity, a higher cost/quality ratio, and larger tech talent pools that are less saturated.

Large Overlap with U.S. Time Zones

Unlike China, Latin American nations have a large overlap with U.S. time zones. All of Latin America is located in U.S. time zones, which means you can easily email, collaborate with, and Zoom with hires in real time. Since communication is smoother, teams are less likely to make mistakes, which means clients are more likely to be satisfied.

Geographic Proximity to the U.S.

Latin American countries are also much closer to the U.S, especially if you choose to hire devs from Caribbean nations like Cuba and the Dominican Republic. So if you feel like meeting your hires, you can just book a flight and see them in person.

Higher Cost/Quality Ratio

Many Latin American developers have staggering cost-to-quality ratios. In other words, they cost less to hire than Chinese devs but boast more of the specialized experience and skills you're looking for.

Several Latin American countries also rank higher than China in terms of English proficiency, including Argentina, Cuba, the Dominican Republic, Costa Rica, Paraguay, and Chile.

Large Tech Talent Pool That’s Less Saturated

Finally, Latin America has a larger tech talent pool that's less saturated. China has many top devs, but most of them are already working for Chinese companies like Alibaba and Tencent. Unless you can afford to pay high salaries and benefits, you'll have a hard time competing for top Chinese tech talent.

In contrast, Latin America is relatively new to the outsourcing world, which means fewer competitors. The continent is also home to 33 countries. With so many countries to choose from, you'll have an easier time locating the right picks for your team. This is especially true if you're looking for people with specific skill sets, such as Ethereum development.

Hire Latin American Developers with Revelo

If you're interested in outsourcing to Latin America but don't have the time to manually test and vet candidates, Revelo's got your back. Unlike traditional job sites, we pre-vet all of our developers for their experience, English proficiency, and knowledge, so you don't have to.

To get started, all you have to do is tell us your goals. In three days, we'll send you a list of hand-picked candidates. We'll also help you handle benefits, payroll, and Latin American labor laws.

Ready to hire the best remote developers for your team? Contact us today to start building your team.

Time Zone Aligned

Our remote engineers are in US time zones or adjacent. Not 10+ hours ahead. Enjoy real-time collaboration with your hires.

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Valeria B.
Fullstack
DEVELOPER
EXPERT IN
EXPERIENCE
5 years
AVAILABILITY
Full-time

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Jose A.

Luan Campos

Jose E.

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Full-Stack developer with 6 years of experience working with MERN stack. Worked for multiple transnational companies focused on web and cloud, technology services, and R&D. Major professional experience in Frontend with Javascript, Node.js, React.js, and Vue.js

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