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Outsourcing :
Outsourcing is the process of contracting with another company or person to do a particular service/job. Compared to 1998, in 2005 manufacturing employment was 19 percent lower in The United States, even though manufacturing output was 10 percent higher . The drop in manufacturing employment coincided with an increase in outsourcing to domestic contractors, including staffing services and an increase in outsourcing of materials and services inputs to foreign companies or affiliates which is also known as offshoring. A number of companies had recently signed or were expected to sign billion-dollar outsourcing deals. Topping the list were Xerox Corp. with a $4 billion plus outsourcing deal, and McDonnell Douglas and General Dynamics,with $3 billion deals.

Advantage of Outsourcing to Other Countries :
China
Over the years China has become the choice of destination for manufacturing and supply chain outsourcing and material supply for many organization in America, Europe and Asia. Companies continue to receive several key benefits when outsourcing current business processes to China, such as: Gowth in Economy - China is the fastest-growing major economy in the world, and has had the fastest growing major economy for the past 30 years with an average annual GDP growth rate over 10%. Cost: The main reason U.S. businesses give for outsourcing is to remain competitive by cutting costs, especially wages. With China’s population well over one billion, the availability of low-cost labor has been one of its strongest attractions. China's labor cost is 1/5th to 1/10th of that of many European and American countries. Companies can gain 50%-60% cost saving from China considering the infrastructure, telecommunications and project management related costs. Experienced and educated workforce: China has realized the benefits of having an educated workforce with a strong work ethic. China has over 800,000 IT professionals and is graduating about 200,000 technical graduates each year. These people coming out have strong technical skills. On average, an engineer with some experience in China is paid a monthly salary of less than $500, compared to up from $5,000 in the US Silicon Valley. Relaxation on legislation restrictions: Over the years, China has relaxed its legislation in order to attract more businesses. Previously, foreign investments in China were primarily structured as joint ventures. But today, most international organizations that want to manufacture and/or assemble products in China are structured as Wholly Foreign Owned Enterprises (WFOE). The advantages to this type of organization entity include independence from a local partner, complete management control, easier strategic alignment with the U.S. or European operations of a parent company and better protection of valuable intellectual property. With it entering WTO (World Trade Organization) in 2001, China has adopted laws and regulations conforming to the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which eases the concern of IP protection with outsourcing to China. Tax incentives: Tax Holidays are currently being offered to foreign companies engaged in manufacturing activities in certain zones, e.g., Export Processing and Foreign Trade Zones. Typically, these holidays are granted for a five-year period, with the first two years at a zero-percent rate and the next three years at a 50 percent rate. However, within the next couple of years, these holidays will be abolished, and the current rate for all companies will be lowered to 25 percent. The various zones also provide certain benefits relative to VAT and Duty. In addition, China is offering new tax structures/incentives, such as Logistics Parks (LPs) for logistic service providers and Foreign Investment Commercial Enterprises (FICEs), that allow existing companies to expand their scope of business.
Africa :
With the maturity of the outsourcing centers in India, Malaysia, China and the Philippines the cost of operation has proven to have climbed. This have lead outsourcing magnates to look for more suitable sites that house fluent speakers of the English language, and Africa seems most promising as the next pinnacle of the outsourcing phenomenon in the field of manufacturing or IT services.
Africa is the poorest continent on the face of the planet, and often considered the most affected by child labor,which the developed countries often take advantage of, in order to bring down their production costs.Over 70% of the region lives and works in extremely poor conditions. Of the 250 million children world wide, it is estimated that 32% work in Africa. A huge scandal arose after nearly half the chocolate purchased in the United States was linked to children producing it in cocoa fields in Africa. Young boys whose ages range from 12 to 16 have been sold into slave labor and were forced to work in cocoa farms in order to harvest the beans, from which chocolate is made, under inhumane conditions and extreme abuse.
SweatShops :

A sweatshop is any business that uses child labor, pays below minimum wages, or creates an unsafe work‐place.It involves a lot of different products such as clothing, shoes, toys, jewelry, sporting goods, fruits and vegetables, and more."
In the 1970s, after considerable awareness was created about the slave like conditions that existed in the sweatshops, international organizations such as the United Nations drafted a "Code of Conduct" which became the "standard" to be followed by the TNCs (Transactional Corporations) and various host countries. Consequently, in 1997, the International Labor Organization adopted a Tripartite Declaration of Principles on Multinational Enterprises and Social Policy. Additionally, in May 1995, the Clothing Manufacturers' Association of the United States of America (employers) and the Amalgamated Clothing Textiles Workers' Union (workers) signed for the first time a national branch collective agreement which included, amongst other aspects, a code of conduct applicable to enterprises and their subcontractors which established minimum standards regarding wages, hours of work, forced labour, child labour, freedom of association, non-discrimination as well as occupational safety and health.
U.S. laws protect worker safety and guarantee minimum hourly wages (currently set at $7.25 an hour for most U.S. jobs). Still, many businesses operate "sweatshops" to increase company profits at laborers' expense. Today, most U.S. sweatshops employ adults and undocumented immigrants. The increased scrutiny from U.S. authorities has deterred sweatshop owners from hiring child laborers. In developing countries (The Third World) child labor is often used in sweatshops.
Nike has been accused time and again of producing many of its goods in third world sweatshops. Although Nike has

China 1997 Nike 1.75 p/day
Indonesia 2002 Nike .27 p/hour
Indonesia 1997 Nike 2.46 p/day
Indonesia 1996 Nike 2.28 p/day
Indonesia 1996 Nike 115p/month Indonesia 1996 Nike .14 p/hour
Indonesia 1996 Nike .22 p/hour
Indonesia 1996 Nike .45 p/hour
Vietnam 1997 Nike 1.60 p/day
Vietnam 2000 Nike 564 p/year

factories located around the globe, most of its manufacturing is located in China, Indonesia, and Vietnam. Nike chooses to locate the majority of their production in such countries because of the abundance of cheap labor. In these countries, Nike has more complaints filed against them from workers and labor organizations than any other American corporation. Some of the human rights charges include the following : the use of child labor in factories, physical, verbal and sexual abuse from superiors, unsafe working conditions including exposure to toxic chemicals and the use of machinery without the proper safety precautions, pay below minimum wage and forced overtime hours.

“Nike’s Labour Practices.” Red de Solidaridad de la Maquila Solidarity Network. 1998. http://www.maquilasolidarity.org/campaigns/nike/labprac98.htm(25Jan.2004). Jens Chr. Andvig, Sudharshan Canagarajah, Anne Kielland . Issues in Child labor in Africa. September 2001
China — An Open Door to Outsourcing .Dec 2009 http://www.internetviz-newsletters .com/moduslink /e_article000481872 .cfm?x=b11,0
Mark Williams and Peng Zhao. The Explosive Growth of China Outsourcing:Opportunities and Challenges. 2005 http://www.dlapiper.com/files/Publication/edc0dc7b-7540-46a6-9754-005dcd03ffc2 /Presentation/PublicationAttachment/ 35796c6a-a89b-451e-b350-035a6ba785af/Outsourcing_to_China_Wiliams_Zhao.pdf

http://home.sandiego.edu/~mzwolinski/Sweatshops_essay_web.pdf http://www.childtrafficking.com/Docs/andvig_canadaraja_kielland_.pdf http://www.dlapiper.com/files/Publication/edc0dc7b-7540-46a6-9754-005dcd03ffc2/Presentation/PublicationAttachment/35796c6a-a89b-451e-b350-035a6ba785af/Outsourcing_to_China_Wiliams_Zhao.pdf http://www.kpmg.com/CN/en/IssuesAndInsights/ArticlesPublications/Newsletters/China-executive-insight/Documents/China-Executive-Insight-0912-02.pdf http://www.aganoconsulting.com/businessnews/wp-

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