Cultural challenges are the greatest hurdles that China faces as it extends its bid to become a major IT and BPO offshoring destination. Having wilfully shunned foreign contact in the previous few centuries, China is now in a hurry to reconnect with the business cultures of the world around it.

This manifests itself most immediately in the English-speaking abilities of its work force, which is not yet comparable to those in India, with its historical link to the UK, or Eastern Europe, with its cultural and physical proximity.

But this is a problem that the country is addressing, with English skills a high priority in Chinese schools. “In 20 years time, the number of English speakers in China is likely to exceed the number of speakers of English as a first language in all the rest of the world,” Prime Minister Gordon Brown said during a trip to China in 2005.

Harder to address and of more concern for Western businesses is the Chinese attitude towards intellectual property. Although the country now has the legal structures in place to prosecute intellectual property infringements, some commentators believe that this is more of sop for Western investors than a genuine bid to reduce IP theft.

Indeed, the Chinese legal system is complex and fraught with local tradition. For example, “According to some Chinese lawyers, it is customary [for the lawyers] to have dinner with the judge the night before a trial,” says Mark Taylor, a partner at City law firm Lovells.