Although many Chinese businesses still deliver their products to retailers themselves, China's professional logistics industry has been growing at a rocketing annual rate.

"In 2003, China's logistics market exceeded 60 billion yuan (about 7.3 billion US dollars), increasing at an annual rate of 30 percent," said Zhang Zhigang, vice-minister of the Ministry of Commerce, at an ongoing conference on China's logistics development and international cooperation.

The logistics business, which distributes goods from factories to retailers, has been increasingly booming since the 1990s in China, where 20 to 30 percent of the cost of a product sold in a store is determined by how much it costs the retailer to get it there.

Today, China's special logistics businesses consist mainly of four parts: traditional transport and warehouse enterprises, Sino-foreign, foreign-capital and private logistics enterprises and those affiliated to mammoth manufacturers, such as Haier, which enjoys booming refrigerator market share worldwide.

"To develop a professional logistics industry that adapts to the needs of the society has already become a key direction for the industry," said Zhang, who noted that China will help developing logistics enterprises in a planned and orderly way.

"We'll also make efforts to break industry limits and regional barriers, including retooling the assets of logistics enterprises."

He said the reform of wholesale and warehouse enterprises should be carried out at the same time.

The value of China's logistics and related markets has exceeded2 trillion yuan (about 242 billion US dollars) and there are 730,000 logistics enterprises in operation.

In 2003, China's logistics industry realized 788 billion yuan of added value, up 10.5 percent over that of the previous year and1.4 and 3.8 percentage points higher than growth rates of gross domestic product and the service industry in the same period.

The International Monetary Fund predicted the market share of the logistics industry in China will rise to 1 trillion yuan (some120 billion dollars) in value by 2010, compared with the 461.8 billion yuan (about 55.6 billion US dollars) in 1999.

Source: Xinhua