The Development of the Language Services Industry in Mainland China: Status Quo and Reflections
By: Brooks Young - Linguitronics
04 February 2019
With the implementation of China's cultural "Going Out" strategy and the Belt and Road Initiative, the need for translation in international exchanges is becoming increasingly recognized. The language services industry is foundational for China’s ability to embrace the world and integrate into it. As a result, more and more international language service providers are entering the Chinese market, which creates direct international competition for local language service providers. On the other hand, along with overseas investments, and the expansion of large Chinese enterprises, China's LSPs have also taken the initiative to go abroad and service the international market.
Internet enterprises, including Baidu, Alibaba, Tencent, Sogou, and Youdao, have blazed a trail in the translation field, initiating cross-border competition in the language services industry. In response to this complex situation, LSPs have to force themselves to adjust their business models and drive for technological innovation: online translation platforms have sprung up, subverting the traditional task-dispatching and task-transferring modes that are marked by slow turn-around times and low efficiency; translation technologies based on AI and NMT have been gradually strengthened, bringing new opportunities and challenges to language service providers; more efficient human-machine collaboration models have been gradually improved and are becoming a trend. There are many indicators that changes in the language services industry are coming.
Recently, the Translators Association of China (TAC) released a report on China's Language Services Industry Development in 2018, which systematically summarizes the translation market in mainland China. The language services industry is becoming the basic guarantee for the sustained and rapid development of China's economy and the fundamental industry to facilitate the exchanges and development in the fields of economy, politics and culture in the era of globalization.
l By the end of June 2018, there are in total 320,874 enterprises offering language services, among which 9,652 enterprises have language services as their main business.
l By income of operation, the gross operation income of nearly 70% of language services enterprises was less than RMB 5 million (appr. USD 0.735 million) in 2017.
l The gross output value of national language services enterprises in 2017 was RMB 35.93 billion (appr. USD 5.28 billion), and the average operation income of single enterprise was RMB 3.723 million (appr. USD 0.55 million). The scale of enterprises was generally small.
l Broad channels are employed when outsourcing language service. Generally, 44% of respondents used a bidding process when in need of outsourced translation work. There is also a certain proportion of respondents that got to know and chose a language service provider through a third-party mediator to outsource the company's translation work. These third-party mediators were: consulting research from foreign third-party reports (32.9%), industry exhibitions and meetings (32.9%); acquaintance’s recommendations (30.9%), or others, including TAC members, online searches, etc.
l Per the survey results, by the end of June 2018, the following languages were used in translating to and from Simplified Chinese: English, Japanese, French, German, Russian, Spanish, Portuguese, Arabic, and Korean, etc. By service type, translation from Simplified Chinese to foreign languages accounted for the largest share (45.5%) according to most enterprises surveyed, followed by translation from foreign languages to Chinese (38.9%) and foreign to foreign language translation (15.5%).
l There are 249 institutions offering Master of Translation and Interpreting (MTI) courses and 272 offering Bachelor of Translation and Interpreting (BTI) courses. More than 8,000 students are recruited annually. As of 2018, around 53,000 students have been recruited in MTI programs in China, with the number of graduates reaching about 30,000.
1. The demand for translation from Chinese as the source language is growing: Thanks to China’s reform, its policy of opening up and the Belt and Road Initiative proposed by the government to promote international trade and cooperation, cross-border cooperation has since proliferated, and the demand for language services from Chinese to foreign languages has grown rapidly. The demand for non-English language services is also growing. However, due to the limited resources, most of the translation work still has to be done by Chinese-speaking translators. Only some tasks with high quality requirements will involve native speakers of the target language.
2. Internationalization has become a constraint: With more and more Chinese enterprises entering the international market, simple translation and localization cannot meet the needs of local cultures and markets. Problems relating to the internationalization of products have become increasingly prominent. Related training and service demands have also increased rapidly.
3. Intensified industry fragmentation: In general, China's translation services market is still in a state of uncontrolled growth; nearly 10,000 translation service providers have their own market positioning and service objectives. As the market is yet to be standardized, the industry is highly fragmented, with great opportunities for integration and merger, but few successful cases.
4. Limited time and fast pace: Fast-paced work that is often delivered through overtime has become the norm. This is possible due to China's special national conditions, plus the flexibility in the system generated by the reform and opening up policy, paired with the diligence of the Chinese people. The timetable for many projects in China is significantly tighter than that for projects from abroad, and will put forward higher requirements for LSPs’ service awareness, flexibility, and project management capabilities.
5. Prices are still low: Although mature local customers have gradually recognized that high quality has reasonable cost, market prices have remained low for the past 10 years. On the other hand, labor costs have been rising and LSPs are under tremendous pressure. The relatively low price of English to foreign language translation has made it difficult for domestic LSPs to cooperate with overseas high-quality LSPs and even individual translators, which has affected the final translation quality.
6. Increased platforms: With the development of technology, traditional language service providers are trying their best to reduce operating costs through technology. More and more local platforms have emerged with appropriate prices, timely services, and solutions to the problems of LSPs, which can expand individual translators' resources, improve dispatching efficiency, shorten production time, and promote the quality of collaborative translation involving a group of people.
7. AI/MT is popular: Artificial intelligence is developing so rapidly that machine translation has created a huge impact on the translation industry. It was once commonly said that MT would replace human translation. More and more individuals and companies are starting to use MT, and have achieved remarkable results especially in vertical areas such as medicine and telecommunication. At present, in addition to open and versatile international MT engines, translation engines in mainland China have mushroomed, which support industry customization and private deployment. Huawei and Johnson & Johnson are typical examples.
8. Industry exchanges are booming: There are many conferences, salons, forums, and lectures and different organizers including government agencies, universities, businesses, industry associations, etc., as well as live broadcast and social media communities (such as WeChat groups) discussing various issues in the translation industry. Practitioners are eager to learn about the industry's cutting-edge developments, technology trends, and successful cases, and to expand their network and resources.
9. The rise of the B2U model: The booming MTI education has spawned the B2U model which is rare abroad. Many enterprises target translation institutions and students, selling CAT tools, corpora and providing translation skills training, etc.
10. Credibility is yet to be improved: The accounting period of domestic customers is generally longer than that of international ones, which creates trouble in capital flow. On the other hand, without a unified credit information system, LSPs still need to face certain financial risks, such as payment delays and even bad debts.
Prospects for 2019:
l In 2019, with the increasing uncertainties of the international situation, the rising trend of de-globalization and trade protectionism, and the continuous disputes between countries (Sino-US trade frictions in particular), the demand for language services will definitely be affected. But in the long run, globalization is an unstoppable trend, and the language services market will continue to grow. Compared to other industries, the language services industry is more resistant to market cycles.
l China is shifting from an export-oriented economic model to a model with equal emphasis on export and import. This should be of great benefit to Chinese language service providers.
l Although the overall environment is full of uncertainties, the prospects for individual companies still depend mainly on their own capabilities. Enterprises should actively respond to market changes, face customer needs, improve customer experience and satisfaction, and actively embrace market challenges.
l AI will change the business model: Machine translation is in the ascendant, and the man-machine combination is the inevitable trend of the future. Technologies such as artificial intelligence, big data, mobile Internet and cloud computing have promoted the continuous development of language technologies, while more translation tools will emerge to further promote the development of machine translation products. The number of machine translation systems for vertical fields (such as patents, medicine, IT, etc.) is still increasing rapidly, cloud translation technology is developing at speed, and various translation platforms continue to spring up.
l The specialization of the translation market is increasingly recognized: In the future, there will be more and more small but competitive companies specializing in a certain fields, including patents, finance, medicine, games, mining, and chemicals, etc.
l The trend of overseas expansion: Domestic LSPs will cooperate with enterprises to open up and explore overseas markets. In this process, direct cooperation between domestic LSPs and overseas customers or LSPs will become an inevitable choice.