The city of Yantai, located on the northern coast of the Shandong province, has made great progress in its animation and software outsourcing, owing to its geological proximity to Japan and the ROK, who are themselves software powerhouses.

Yantai now has more than 200 businesses in the software industry, about 60 of which provide outsourcing services in digital information technologies, cartoons and video games. They generated more than $60 million worth of offshore business last year, according to the city's commerce bureau.

Yantai plans to spend at least 30 billion yuan ($4.6 billion) on a 1,110-hectare outsourcing park to pull in 80,000 skilled workers from animation and software sectors.

Yantai has spent 1 billion yuan on industrial parks for the software and animation development with a focus on outsourcing.

One of these parks, the Yantai Animation Park, is considered a national animation base by the General Administration of Press and Publication. The Shandong Provincial Culture Bureau has declared it a culture industry demonstration base. Six out of its 40 animation companies now provide overseas outsourcing services.