BT is opening two technology centres in China, tapping into local talent for software development and R&D.

The telco's R&D lab in Shanghai will operate across a range of technology areas, from defining new product and service concepts through to the development of prototypes.

A software development and customer service centre in Dalian, north-east China, will focus on developing operational and business support systems, software and hardware integration and supporting Chinese customers in their local language.

"Setting up the Dalian Technology and Service Centre and the R&D Centre in Shanghai will help us guarantee that Chinese and global customers in China receive the same high quality of service we provide in the rest of the world," said BT chief executive Ben Verwaayen.

China is making a growing play for the outsourcing market and this latest move is part of a trend for companies to localise services in the country and take advantage of low labour costs.

"The news that BT is offshoring such a sensitive function as R&D to China may come as a surprise in some circles, as China is not renowned for its adherence to data protection and IP legislation," said Nigel Roxburgh, research director for the National Outsourcing Association.

"However, for a company the size of BT to offshore R&D to China signifies that the government is cracking down on companies which flout data laws and is ready to enforce an acceptance of international data standards."