China will issue new rules this year to regulate the expansion of large chain stores, a move that would disproportionately affect foreign retailers, a Commerce Ministry official said in comments published on Tuesday.

Huang Hai, assistant Minister of Commerce, was cited by the China Business News as saying the new rules would place restrictions on the location and planning of both locally and foreign-owned large stores.

"It will use the same standards for domestic and foreign companies," the paper quoted Huang as saying.

Huang gave few details of the regulation, but said it would not limit the specific size of stores and that it would institute a public hearing process for the approval of new stores.

But the paper noted that foreign retailers would likely be most affected by such a move because many of the big supermarkets and warehouse stores in large cities were foreign-owned.

It quoted Huang as saying that nationwide, the foreign share in the market was not very high, but that in some developed regions and in certain business types, foreign expansion was rapid.

Huang cited a recent research report by the statistics bureau and other agencies as showing that last year, foreign investment in chain stores was twice that of domestic investment.

He said the regulation would not impose any limitations on mergers and acquisitions by foreign retailers, an area he said would fall under the country's expected anti-monopoly law.

Many local retailers have expressed concern over the growing influence of foreign store chains like Wal-Mart and Carrefour, which have made significant inroads into the Chinese market in recent years.

Huang said the government was keeping an eye on the growth of foreign retailers, which he said had been rapidly buying up stores in key locations.

"As for the rapid expansion and development of foreign store chains, the government has already begun to notice it and is carrying out specific studies of this situation and possible measures," he was quoted as saying.

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