Foreign capital boosts development of China's retail sector
www.chinaview.cn 2004-02-07 13:48:22
HANGZHOU, Feb. 7 (Xinhuanet) -- As the Chinese market ultimately opens, domestic retailing will step into a phase of rapid development, said Long Yongtu, former minister of foreign trade and economic cooperation, at a recent summit forum of China's retail trade.
According to China's commitment to the World Trade Organization(WTO), Dec. 11, 2004 is the deadline for China's retailing market to be completely open to foreign capital.
As a matter of fact, a number of foreign retailing giants have already landed in China, extensively and rapidly taking China's market, said Long.
From east China's Shanghai municipality to the western city of Kunming, citizens are used to shopping at Carrefour and Metro. Wal-Mart has even opened stores and started key construction projects in some cities.
However, the rapid penetration of foreign capital has brought anxiety for certain domestic retailers. They are afraid that China's retail trade will be greatly impacted by foreign giants.
Yet according to Long, the opening of China's retailing market would, generally speaking, be favorable for the development of China's retail trade.
Retailers both at home and abroad would participate in the competition together in the vast Chinese market, and only those who provided better services could win the consumers, he said, and"this drives the domestic retailers to improve their competitiveness so as to survive."
In the past three years, many foreign retailing giants like Carrefour and Metro opened stores in Hangzhou, capital of east China's Zhejiang province. Apart from enjoying a good sales record,they boosted the development of local retail trade.
According to statistics released by the Hangzhou statistical bureau, in Hangzhou there are 10 foreign retailers, which have opened 15 stores, covering an area of 180,000 sq. meters. In 2003,they achieved a total sales of 2 billion yuan (242 million US dollars), accounting for four percent of Hangzhou's gross retailing sale.
The statistics also showed that Hangzhou's gross retailing sales kept increasing by 10 percent since 1997, much higher than China's average level.
Zhang Xukun, economics professor of Zhejiang University, said that foreign retailing giants had brought deep influences to localretailers in terms of sales and management methods.
The retailing sales accounted for quite a small proportion of China's GDP, Zhang said. There remained huge room for the development of retail trade in China's small and medium-sized cities and the vast rural areas.
Gu Linghua, general manager of Hangzhou Department Store, said that the retailing giants from developed countries had rich experience in sales and management, which was worth studying by Chinese retailers.
"We are not afraid of competition but afraid of no courage to take part in the competition", said Li Ling, general manager of Zhejiang Yintai Department Store. "We could see our bright future through today's foreign retailing giants." Enditem
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