With over 2 million IT workers, 1.3 billion potential consumers and a booming economy, China has gained the attention of multinational corporations as an offshore destination for IT work. Those firms wanting to complement India as the preferred location for software development and back-office centers also look at China as a growing market for their products and services. This chapter looks at China’s ability to compete with India in the global ITO/BPO market. A national, concerted effort by the Chinese government involving ICT infrastructure investment, the creation of a national ITO/BPO image and efforts to attract foreign investment is underway. As this chapter shows, even with China’s impressive growth in the market, it is not quite ready to capture a significant portion of the global market. China’s service providers are currently immature, small and fragmented. Additionally, intellectual property concerns and lack of English proficiency hamper China’s current efforts to compete for North American and European business. However, the government and suppliers are actively addressing these challenges, thus CIOs should keep an eye on China.