China to lift restrictions on foreign investment in retailing

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Last updated at: (Beijing Time) Wednesday, March 17, 2004

China to lift restrictions on foreign investment in retailing

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China will lift restrictions on foreign investment in retailing, including restrictions on foreign ownership and numbers of branches, before December 11, said Zhang Zhigang, vice commerce minister of China, at a national meeting on Tuesday.

He said that the move would help China to fulfill its commitments of opening its commercial field according to regulations of the World Trade Organization (WTO).

"By showing their advanced management and marketing skills, foreign retailers played a positive role in promoting development of China's retailing," said Zhang.

Starting from 1992, China has received foreign investment of three billion US dollars in retailing and approved 264 foreign-funded retailers with 2,200 chain stores, according to the official statistics.

In 2003, French retailer Carrefour's sales reached 13.4 billion yuan (1.6 billion US dollars), up 25.7 percent over the previous year, and ranked fifth in China. Wal-Mart, the world's largest retailer which has 33 chain stores in China, earned sales of 5.85 billion yuan (0.7 billion US dollars) and bought commodities valued at 15 billion US dollars from China in 2003.

But the foreign investment in China's commercial fields only covered 0.6 percent of the total foreign investment in China while the sale of foreign-funded commercial companies accounted for less than 3.5 percent of China's total retail sale, according to relevant experts.

Although the foreign investment in commercial fields mostly poured into retailing in China's developed eastern areas, the relatively-poor western areas were expected to receive more foreign investment in more various commercial fields, experts believed.

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