While many businesses are worried about the impact of the global financial crisis, the local government in Hangzhou, Zhejiang province, sees an opportunity to boost its financial outsourcing industry.

As the crisis bites, many multinationals are transferring operations to China and India to reduce costs, offering new opportunities to Hangzhou to become a global outsourcing industry base, Cai Qi, Hangzhou's mayor, told the International Outsourcing Business Development Summit in the city yesterday.

The local government has allocated 100 million yuan to support the development of outsourcing industry, to which it will add a further 200 million yuan next year, he said.

Hangzhou's offshore outsourcing reached $160 million in the first nine months of this year, up 89 percent year-on-year, with financial outsourcing accounting for 43 percent of the total, said Li Ling, director of the city's external economic and trade bureau.

She added that the city is on the hunt for Wall Street and Silicon Valley professionals, as Hangzhou needs talents with international skills and backgrounds to raise its outsourcing industry to a higher level.

"Many multinationals have dismissed employees to cut costs, resulting in more opportunities for outsourcing services," said Gu Guoying, vice-president of Insigma Technology, an IT provider focused on financial outsourcing services in Hangzhou.

But she cautioned that the number of "large-scale outsourcing projects has fallen as a result of the impact of the credit freeze on M&As in the US and EU."

"A big deal with an American supplier was postponed due to the current financial turmoil," said Zhou Feng, vice-president of Handsome Electronics Co, a local outsourcing service provider.

"But we also see opportunities, with 60 percent of Japanese outsourcing services coming to China."