Commerce Official: China Has no Intention of Inhibiting Competition in its Culti

Jiang Zengwei, Vice Minister of China's Ministry of Commerce, said at a press conference on February 9 that China's plan to cultivate large distribution enterprise groups is not intended to inhibit competition, but rather to help these enterprises grow in size and strength through full market competition. Government support is mainly to create a favorable competition environment.

Jiang noted that over 99 percent of distribution enterprises in China are small and medium-sized and constitute 70 percent of all small and medium-sized enterprises in China. Chinese distribution enterprises in the commerce and trade sectors have a total of 80 million employees, are small in size, low in market concentration, poor in efficiency and weak in competitiveness. There is still a large gap between Chinese enterprises and international titans.

He compared the global retail giant Walmart to China's current largest home appliance chain store operator, Gome. Walmart's sales in 2008 totaled 378.7 billion USD, equivalent to 2.5 trillion yuan or 23.9 percent of China's gross retail consumer goods sales, while Gome's sales in 2008 was 102.3 billion yuan. He added that it is impossible to close the gap between China's retailers and international large-sized department stores and retail companies within a period of one or two years. The task to close the gap is arduous and will take a long time.

He added however, that China needs to have enterprises similar to Walmart, so that it is able to make rapid market responses in case of natural disasters and emergencies. Moreover, large-sized enterprises have a greater sense of duty when it comes to assuming social responsibilities.

Jiang noted that government support is mainly evident in the elimination of policy obstacles to the development of enterprises such as the removal of barriers between regional markets, the promotion of cross-region mergers and acquisitions in the distribution sector, and the nurturing of a sound competitive environment for enterprises.

At the end of last year, Chen Deming, Minister of Commerce, said China will carry out cross-region integrations of state-owned distribution enterprises by means such as stake swapping and asset acquisition, in order to form and nurture several internationally competitive state-owned large-sized distribution enterprise groups in roughly three years.

In January, the Ministry of Commerce and the China Development Bank issued a notice deciding to jointly increase loans to the distribution sector, support the development of a number of distribution enterprises, as well as try to establish a preliminary and modern urban and rural distribution network system by the end of 2009.

                                                                              By People's Daily Online