Provincial governments have been told to map out a development plan
for retail networks in large and mid-sized cities by next year or
risk refusal of approval for any foreign-funded retail enterprises
for cities which do not have such plans.
The announcement by the State Economic and Trade Commission (SETC)
also reaffirmed that public hearings should be held before setting
up any large-scale shopping centers, such as supermarkets.
The new policy aims to readjust the density of retail market
enterprises in certain districts and prevent over-competition in
the field, according to an SETC official, who declined to be
named.
The official warns that without a development layout, numerous
large-scale shopping centers and malls could be concentrated in
certain districts of a city, which not only harms the development
of retail business but also causes a waste of resources.
However, foreign analysts believe that the new policy intends to
slow down the accelerating expansion of foreign retail giants on
the Chinese retail market, according to the Wall Street
Journal.
Foreign retail giants such as France-base Carrefour; United
States-based Wal-Mart Stores and PriceMart; and Dutch-based Makro
taken firm footing in major cities like Beijing, Shanghai and
Guangzhou.
Carrefour announced at the end of last year that it would double
the number of its supermarkets in China by the end of 2004 from the
present 30. Wal-Mart, meanwhile, said it intends to establish
another 22 stores this year.
The new policy may put the brakes on their ambitious expansion
plans, analysts said.
But some foreign-funded retailers said they are not worried about
the new policy.
A
manager of a foreign-funded shopping center, who declined to be
named, said that Beijing municipal government has already issued a
similar policy, which fixes the minimum distance between shopping
centers larger than 5,000 square meters.
The Shanghai government also requires a public hearing before the
launching new stores, he said.
According to him, while the new policy may theoretically affect the
development of foreign-funded enterprises, the effect will not be
as serious as some analysts suggest.
The new policy also mirrors possible different attitudes on the
development of foreign-funded shopping centers between central and
local governments, according to the analysts.
The central government wants to help to develop domestic retail
enterprises and ease the competition in the field. However, local
governments hope the establishment of more foreign-invested retail
enterprises can create more job opportunities.
Some domestic companies have urged the government not to fully open
up the retail market to foreign competitors when local retailers
are still underdeveloped.
(China Daily February 22, 2003)