Beijing Hualian Group, one of China's leading commercial enterprises, is speeding up its expansion into the west of China. A group shopping mall is expected to be opened in Lanzhou, the capital city of Northwest China's Gansu Province, in October, according to Tuesday's China Daily.

Though shopping mall construction has been regarded as an overheated sector alongside steel, cement and aluminum, by the central government, Hualian says it believes that mall mania is happening in key cities, involving Beijing, Shanghai and Guangzhou, but huge business opportunities can still be explored in second-tier and third-tier cities.

Xu Yong, deputy president with the Beijing Hualian Group, said that the central government's decision on cooling off the mall industry aimed at squeezing out the bubbles in the sector or picking off speculators, who develop the malls in name to acquire banking loans in reality.

"Different from speculators, we are showing our robust capital strength and rich commercial operation experiences to establish the mall, and we are confident about the prosperity of the Hualian Lanzhou," said Xu.

Xu said that funds needed for the shopping mall were raised by the group. However, he declined to disclose the total investment in the huge project.

The new shopping mall, with a business area at 66,000 square metres, will be the largest commercial building in Lanzhou and boasts various shopping, entertainment and catering areas.

Insiders say that Beijing Hualian is penetrating the western China market step by step.

In 2002, the group launched its first shopping mall in Huhhot, the capital city of the Inner Mongolia Autonomous Region, which is performing well after its opening.

The commercial giant also opened two large department stores in Chengdu, the capital city of Southwest China's Sichuan Province.One of them is under refurbishment and will reopen in September.

And three large-scale supermarkets, each with business areas exceeding 10,000 square metres,have been set up in Guiyang, the capital of Southwest China's Guizhou Province; Suining and Panzhihua respectively.

Yan Ligang, a spokesman of the Beijing Commerce Bureau, said that Hualian's move was encouraged by the municipal government.

"The State-owned enterprise optimizes its business structures by exploring new markets, which has set a good example for others," said Yan.

Official sources revealed that the Beijing Hualian Group is the fourth largest commercial chain retailer in China, whose sales volume amounted to 13.6 billion yuan (US$1.64 billion) last year.

So far, it boasts over 20 department stores (including shopping malls) and 80 large supermarkets around the nation. By 2005, the group will expand its department stores (including shopping malls) and supermarkets to 80 and 150 respectively, with sales volume reaching 30 billion yuan (US$3.61 billion).

Source: China Daily