China will push to improve its wholesale and retail distribution
networks in order to increase consumer spending, a key economic
engine during the global downturn, one of the country's top
officials said in Shanghai.
"China is confronted with a slumping international economic
situation this year, and the economic recession facing our major
trade partners in the United State, Japan and the European Union
leads to waning exports," said Li Rongrong, minister of the State Economic
and Trade Commission, yesterday.
"For China to further boost consumer spending to reach this year's
7 percent economic growth target, we must cultivate a sound
distribution sector," Li said.
The distribution sector refers to retail, wholesale and catering
companies.
Li
made the remarks at a two-day national working conference in
Shanghai that concluded yesterday, at which government officials
and industry leaders exchanged opinions and experience on how to
bolster consumer spending.
"Though the distribution sector has grown strongly in recent years,
it still only accounts for 9 percent of the country's gross
domestic product, half the level of developed countries," said
Li.
Retail sales last year rose 10.1 percent from a year earlier to 3.8
trillion yuan (US$453 billion).
Retail sales this year is expected to grow by 10 percent.
China has committed to gradually opening its retail, wholesale and
service industries to foreign investors two to five years after
joining the World Trade
Organization.
"The majority of distribution enterprises are too small to contend
with foreign rivals which boast abundant capital, sufficient
management system and mature global procurement networks," said Li.
"Sales of our top retailer last year were only equal to 1 percent
of Wal-Mart's."
To
strengthen local firms, Li said the government will push for the
creation and growth of strong retail chains.
"We will encourage qualified chain stores to expand through
mergers, asset restructuring, acquisitions and franchising," said
the minister, adding that the government will help strong companies
raise capital through stock listings or restructuring.
By
2005, the government hopes to see sales at domestic chain firms hit
700 billion yuan, with an annual growth rate of 35 percent. About
20 chain giants with annual sales exceeding 5 billion yuan each are
expected to be formed.
The central government has planned several steps it will take to
help chain companies prosper. For example, the Ministry of Culture
and Press
and Publication Administration will make it easier for chain
firms to distribute books, newspapers and videotapes, while the
Ministry of Finance works to reduce tax problems for chain
companies.
The central government will also strive to improve the logistics
industry, and develop e-commerce systems.
(eastday.com January 22,
2002)