The Tenth Five-Year Plan of Retail and Wholesale Industry and its Development

During the 10th Five-Year Plan period (2001-05), a number of large conglomerates of commodity circulation will come into being through M&A, combination, chain-store operation or agent management practice. They will be characterized by specialties in business, sound management, wide radiation and strong competitiveness. By the end of 2005, medium and small-sized State-owned stores will have basically gone through reconstruction or restructuring. They will be regrouped into agglomerations at various levels and with different scales.

Meanwhile a number of large commercial conglomerates with annual retail sales over 30 billion yuan will be formed through consolidating part of the stores. Some of the large monopolies will shoulder the task of developing large commodity circulation conglomerates.

Shanghai plans to set up two or three large conglomerates with retail sales over 30 billion yuan and more than 10 medium-sized ones with retail sales over 10 billion yuan by the end of the period. Beijing plans to establish one or two chain-store conglomerates with retail sales over 10 billion yuan and three to five ones with retail sales over 5 billion yuan.

China aims to consolidate the key role of chain-store business in the commercial and service trades in five years to ensure big increment of sales revenue and number of chain business enterprises and chain stores.

By the end of 2005, the number of chain stores will reach 100,000 with sales revenue amounting to 700 billion yuan, or about 20 percent of the overall sales revenue of wholesale, retailing and catering trade. 20 chain-store enterprises each with annual sales revenue of over 5 billion yuan and 40 ones each with annual sales revenue of 2-5 billion yuan will be built. Five to 10 internationally competitive large chain conglomerates will be incubated.

Restructuring of State-owned commercial enterprises will enter a vital stage, with the focus to be on dealing with the difficulties in debt-ridden State-owned wholesale enterprises and large general-line retail enterprises. Small and midsize State-owned commodity circulation enterprises will be further promoted by means of joint stock cooperation, merger, purchase or closedown.

Building of a modern enterprise system will be stepped up. At present, public economy accounts for more than 30 percent of the commodity circulation in China, of which, the public sector takes up more than 20 percent, the collective economy, more than 10 percent, and other economic sectors, more than 60 percent. During the 2001-2005 period, the country will continue to promote and standardize the reform in restructuring and withdraw small and mid-size State-owned enterprises from the public sector through leasing or selling in a bid to establish a pattern of commodity circulation shared by State-owned enterprises and share-holding enterprises, non-public enterprises and foreign-funded enterprises.

Current situation of the retailing and wholesale sector

In 2000, the volume of domestic retail sales of commodities amounted to 3,415.3 billion yuan, an increase of 9.7 percent over the previous year, of which 2,111 billion yuan was realized in urban areas, a 10.6 percent growth; 1,304.3 billion yuan occurred in rural areas, an 8 percent increase.

In 2000, the proportion of State-owned retail sales lowered in the total volume of domestic retail sales of commodities. Of the domestic total sales volume, 30 percent or more was public-owned, with 20 percent being State-owned and 10 percent collectively-owned. The rest 60 percent was shared by entities of other ownerships.

In 2000, retail volume of food, beverage, cigarette and wine sustained a big increase of 28 percent, 62 percent, 61 percent and 108 percent, respectively, over the previous year. Retails of garments and daily necessities increased 20 percent and 17 percent respectively.

In 2001, the volume of domestic retail sales of commodities reached 3,759.5 billion yuan, up 10.1 percent over the previous year, of which 354.3 billion yuan were from urban areas and 1,405.2 billion yuan from rural areas.

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