Chinese IT service providers need to help clients locate new profit streams rather than just reducing costs, said a senior industry expert in outsourcing businesses.

"Domestic sourcing companies have yet to change their role from a merely cost center to a profit generator," Qu Lingnian, president of the Beijing Association of Sourcing Services, told China Daily in a recent exclusive interview.

Rising costs for labor and operations, as well as fluctuations in foreign exchange, have left little room for low prices while maintaining profit margins, much like the manufacturing industry, Qu said.