Huang Youyi, Vice President of FIT and TAC, attended “Localization and Translation Thailand” on December 3, 2009 at the invitation of the Royal Institute of Thailand. He extended warm congratulations on behalf of FIT and TAC to the organizers. He also delivered a speech entitled “Localization Service in China -- A sector with Great Potential” (full text attached below).

This November, TAC officially established its tenth committee – the Localization Service Committee of TAC, in response to the rapid development of the localization service industry.

Localization service sector in China received attention in Thailand

Huang Youyi, Vice President of FIT and TAC, attended “Localization and Translation Thailand” on December 3, 2009 at the invitation of the Royal Institute of Thailand. He extended warm congratulations on behalf of FIT and TAC to the organizers. He also delivered a speech entitled “Localization Service in China -- A sector with Great Potential” (full text attached below).

This November, TAC officially established its tenth committee – the Localization Service Committee of TAC, in response to the rapid development of the localization service industry.

Localization Service in China -- A sector with Great Potential

Huang Youyi  Vice President and Secretary General of TAC

Dear friends, dear colleagues:

It’s a great pleasure for me to be invited to this conference. My first visit to this beautiful country in 2005 for the Power of Language Conference left me a very good impression. It’s such a delight to come again and meet old friends like Dr. Maneerat and make new friends too.

First, please allow me to extend, on behalf of the International Federation of Translators (FIT) and the Translators Association of China (TAC), our warm congratulations to the opening of this important event. Our thanks go to the three hosts: the Royal Institute of Thailand, Proz.com and LISA.

Today, I am going to talk about the localization service sector in China from the perspective of TAC. First, I would make a very brief introduction of TAC as a background. Then I would like to share with you TAC’s views on the development of the localization service sector and some features of the Chinese localization service sector. In the end, I would introduce what TAC plans to do through its Localization Service Committee to facilitate the healthy growth of the localization service sector in China. For your information, the tenth committee of TAC: the Localization Service Committee of TAC (the LSC) was officially formed about half a month ago.

I. TAC – an industry association for language professionals & companies

TAC, the Translators Association of China, is the only national association for the translation industry in China. It is an association for professional translators, interpreters and terminologists as well as institutions and corporations in the translation industry: translation and localization service providers, tool and technology developers, educational and training institutions, consulting firms and buyers of language services.

II. Localization service: the future of the modern language service industry

Localization is a relatively new concept with a history of a little over 20 years. For TAC, it is a concept that came to our knowledge only 4-5 years ago. But we are convinced that it represents the future of the modern language service industry.

1. Demand for language service has undergone great changes. When I became a translator at China International Publishing Group more than 30 years ago, it usually took a whole year to have a book translated into English and published. Today, however, the demand for faster and better services has to be met by modern technology both for management and production. To translate and publish a manual of a million words into 10 languages within 10 days is a mission impossible for traditional translation companies. But that’s the kind of projects many localization companies handle every day.

2. Localization service will dominate the language service market. Localization is the process of adapting a product or service to the linguistic, cultural and technical requirements of a target market. It is by definition a modern service implemented with the assistance of advanced IT technology and tools such as Translation Memory (TM), Machine Translation (MT), Globalization Information Management (GIM) and Content Management System (CMS). Therefore, it is much more efficient and responsive to the current market needs.

Localization companies usually provide a much wider range of services than just translation and editing. For example, technical writing, Desktop Publishing (DTP), product integration and testing services, which are unheard of in traditional translation companies.

Localization companies typically implement strict process and quality management measures to ensure time and quality delivery of complex projects, such as multi-language product releases at multi-locations. What’s more, thanks to the work of LISA, the Localization Industry Standards Association, localization practices across the globe more or less follow international standards and norms, which ensures smooth communication with global clients.

Last but certainly not the least, localization has become a driving force for business globalization. Localized products have proven to better meet the needs of a specific market in terms of production function, legal compliance and local traditions, reduce production and maintenance cost, and therefore help to increase the profile and overall competitiveness of the producer in the target market. More and more global companies are beginning to realize the importance to localization.

This is by no means to suggest that localization will replace traditional translation service once and for all. There is still a market for traditional translation service. But localization service will surely become a dominant sector in the modern language service industry.

II. China: a new Global Language Service Delivery Center (GLSDC)

The judgment is made based on an analysis of the market potential, preparedness of the service side and policy support from the government.

1. Huge market potential for localization service. As one of the fastest growing economies in the world, China has been a major receiver of Foreign Direct Investment (FDI) for years. In 2008, FDI channeled to China totaled US$ 108 billion, a 30 percent increase over that of the previous year, making China the third largest FDI recipient. By the end of 2008, 480 of the Fortune 500 companies have established branches or subsidiaries in China, and 42 of them have their Asian headquarters set up in China. These are all signs suggesting that China will develop into another “global multilingual information processing center,” after Ireland.

The global financial crisis has further made China a major source of FDI as well. Although global FDI shrunk by 13.5 percent in 2008, overseas investment by Chinese corporations was US$ 55.9 billion, a 111 percent increase over that of the previous period. China has become the 12^th largest source country of FDI. China Overseas Investment Fair held in early November in Beijing attracted participants from 122 countries.

As a result of such intensive global economic activities, the demand potential for localization services from transnational companies both home and abroad is huge.

2. The growing localization service sector. Localization service was introduced to China in the early 1990s with the need to localize computer software and other IT products into Chinese. From then on, a number of localization service companies, some being branches of international companies, started to grow. By 2009 when the Localization Service Committee of TAC was established, about 80 percent of the world’s top 25 LSPs (ranked by Common Sense Advisory) have established branch companies or offices in China, and a dozen of domestic localization companies have grown to national or even international brands. Vinceinfo, a company with localization service as its core business line, was listed at the Nasdaq Stock Market. Another internationally known outsourcing company hiSoft was listed among the Top 25 Language Service Providers of the World by Common Sense Advisory in 2008 and 2009. Most of the top 10 software outsourcing companies have set up independent localization departments to handle increasing localization business. And with the launch of the LSC of TAC in November, Chinese localization service sector is ready to take the opportunities AND challenges posed by the rapidly changing market.

3. Policy support from the national and local governments. The Chinese government realizes the great importance of the service outsourcing industry to which localization belongs. In a meeting held this February, the Central Government branded 20 cities, including Beijing and Shanghai, as “Model Service Outsourcing Cities”, and has announced a series of preferential policies to encourage the development of this sector. Some of these cities, such as Chengdu and Wuxi, have listed localization service as part of the hi-tech service outsourcing industry. This means that localization service companies in those cities will be able to enjoy tax reduction, training support, flexible working arrangement and more. In fact, some localization companies are already taking advantage of such policies from the national and local governments.

III. Features of the Chinese localization market

The localization service market in China is on its way to maturity, and demonstrates the following features:

1. A small number of localization service companies generate big revenues. The estimation is that there are around 60 localization service companies of considerable scale operating in the country, a fourth of them are local branches of international businesses, such as Lionbridge, SDL, Star and Toin. This is a very small number compared with the estimation of 3,000 translation companies, but the per capita revenue of these companies are several times of that of traditional translation service companies. What’s more, a growing number of translation companies are also handling localization projects. Therefore, the total output of localization is believed to be quite substantial, though no specific figure is available now.

2. Localization projects come predominantly from the West. Currently, 99 percent of the businesses of Chinese localization service companies come from Europe and North America. So a number of localization companies have established international branches and offices to market their services. Boffin even moved its headquarters to Canada. . Some of the high-end localization needs of Chinese corporations going international are met by in-house staff (for better quality control), or are outsourced to language service providers in the target market(localize it in the local market). But still a large portion of the export-oriented corporations in China are not aware of the importance of localization, and base their choice of service providers mainly on price considerations. It will be a long term mission to make them realize of the benefit that professional localization service can bring them.

3. The localization sector is in urgent need of more and better professionals. Localization is still a strange technical term for most Chinese, not the least for university teachers. Since there are few graduates readily prepared for this industry, most localization companies have to run costly internal training for their new employees. Some big companies such as Lionbridge are beginning to work with universities to train people for their specific needs, but most companies cannot afford to do so. A good sign is that professional training bodies are emerging. Universities are also attaching more importance to the training of professionals geared to market needs, with the introduction of a BA program on translation and interpretation in 19 universities and MTI (Master of Translation and Interpretation ) program in 40 universities. In an effort to enrich their curriculum, and improve the employment rate of their graduates, they have shown great interest in localization and related technologies.

IV. TAC’s plan to facilitate the healthy development of the localization sector

The newly established Localization Service Committee of TAC consists of Chinese and overseas localization service providers, tool and technology providers, training and education organizations, buyers, consulting individuals and organization on internationalization and localization who are members of the Translators Association of China (TAC). So far, 20 companies including LSPs and clients have joined TAC and committed to work jointly to ensure the healthy development of the localization industry.

The LSC plans to work on four key areas at the present stage: establish standards and norms and promote industry best practices; advertise the industry home and abroad; consolidate industry resources and facilitate international exchanges and cooperation. I will elaborate on these four tasks a little bit.

1. Establishing standards and norms and promoting industry best practices so as to protect the rights and interests of practitioners. As a new sector, everything needs to start from scratch, and the first priority is to establish norms and best practices. The LSC will work closely with industry experts and publish regulatory documents such as quality standards, convention for rights protection of industry players and specifications on honesty in management and operations. These documents will help to create a fair and healthy environment for the growth of the localization service industry.

2. Promoting localization service through various channels and means both home and abroad to increase visibility of the sector. Localization service, like translation service, is offered behind the curtain. Although it is a vital part of the globalization process, localization service is largely invisible to the general public who are end users of the localized products or services. If the value of localization service is not recognized, who would wish to enter this sector? Therefore, the LSC makes industry promotion a priority of its work.

The first target group will be university students. The LSC plans to run a program called “University Tours of Localization”, inviting industry experts and corporate executives to meet and talk with university teachers and students, explain what localization means, how it can be incorporated into the school curriculum and what types of graduates are in demand. It is our hope that more and more high-quality graduates will join the localization business.

The LSC also plans to host seminars, organize media interviews, publish books and articles to let the government, the clients, universities and outsiders understand the sector.

3. Consolidating industry resources to enrich the localization industry chain. The localization industry consists of a variety of players in the industry chain: service providers, buyers, tools developers, educational and training institutions and consulting firms. The forces should be joined together to ensure the healthy and all-round development of the industry. The Localization Service Committee is open to all, and will try to involve as many members as possible so as to increase the “assets” of the committee for the benefit of the whole industry.

The committee will also initiate industry surveys to better understand the market and the needs of the various players. This serves as the basis for services to the members and the general public as a whole.

4. Facilitating industry-wide exchanges and win-win cooperation. Communication and exchanges among the multiple players of the localization industry chain has been rare in China, and the LSC is going to make a difference. The LSC plans to design and organize a series of seminars, workshops, roundtables and exhibitions to encourage discussions and dialogues on issues of common concern. These activities will be designed to take place at various locations based on actual demand. Preference will be given to universities as well as local economic zones and software parks where the demand for localization service is strongest.

The localization industry emerges and grows with globalization and internationalization, and the Chinese localization sector has always kept abreast with international developments. A number of Chinese localization companies are members of international industry organizations such as LISA and GALA. The LSC is an open platform for communication, and we welcome opportunities for cooperation with sister organizations and institutions in Asia and beyond.

Before I conclude my presentation, please allow me to take this opportunity to make two announcements:

First: Translators Association of China has recently launched its first English website which provides information about the association, and the translation industry in China, including the localization sector. You are more than welcome to visit the website for more information about TAC and translation in China.

Second: The Sixth FIT Asian Translators Forum, the regional gathering of the Asian translation community held every three years, will take place on November 6-8, 2010 in Macao. The call for papers is now available for download at TAC website.

Thank you.