The Chinese Government will assist large companies and groups in the
distribution industry to further promote reform and development of the sector.
"Our target is to help establish, in five to eight years, 15 to 20
large-scale distribution companies with well-known brands and self-owned
intellectual property rights," said Di Jiankai, director of the commercial
reform department under the Ministry of Commerce.
The distribution industry encompasses retail, distribution, logistics,
catering and community services and involves the process of delivering goods and
services.
Di expected the sales network and profitability of these companies would far
exceed that of their domestic rivals, with some even matching international
counterparts.
"Such large distribution companies will play a leading role in a number of
aspects such as helping restructure the distribution industry, encouraging the
growth of small- and medium-sized firms, promoting the manufacturing industry
and creating jobs," he said.
To achieve this goal, the ministry will encourage large distribution
companies to boost their business through mergers and acquisitions.
The ministry plans to set up a system for companies to monitor overseas
investment risks, help guide their outbound investment and trade, and cultivate
some leading regional distribution firms across China.
"We will continue to co-operate with the China Development Bank to support
the establishment of infrastructure for a modern distribution network across
China with policy-based low-interest loans," Di said.
The ministry set up pilot cities and provinces for distribution sector reform
in 2005.
Twenty major distribution companies achieved sales revenue of 531.7 billion
yuan (US$66.5 billion) in 2005, up by over 31 per cent year-on-year, while
profit jumped 30 per cent year-on-year to 6.8 billion yuan (US$850 million).
The ministry is also expected to take measures to promote the development of
the distribution industry.
For example, it will help co-ordinate between banks and companies to resolve
or reduce some of the debts of State-owned distribution firms.
It will also help to rejuvenate the brands of some traditional Chinese firms.
The ministry predicted China's distribution industry would continue its rapid
growth due to its increasing role in the market and rural reform.
According to the latest statistics, jointly published by the ministry and the
Development Research Centre of the State Council, retail sales of consumer goods
will exceed 7.5 trillion yuan (US$937.5 billion) in 2006, an increase of 13 per
cent from a year ago.
Sales of production materials are set to top 15.5 trillion yuan (US$1.93
trillion), up 12 per cent on 2005.
(China Daily 05/09/2006 page9)
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