Essay: China making several concessions in its public policy
China made several specific concessions in its public policy on its accession to the WTO that have a direct bearing on the wholesaling, retailing and logistics sectors. Foreign companies will be allowed to import and distribute most products by 2004. New regulations permitting foreign equity ownership up to 49% in the wholesaling and logistics sectors allow full ownership after three years.
This means that international retailers, manufacturers and third-party service companies are being encouraged to invest in the full range of logistics services such as storage and warehousing, packaging, trucking, air courier services, freight forwarding, after-sales servicing and the provision of consumer credit. U.S. and EU officials are actively monitoring China’s commitments to reform entered into as part of its WTO accession agreement with the US government and European Commission. (Kacker, 15)
China is a market many perceive as providing tremendous retailing space and opportunities for development of foreign FMCG retailers. The country is also an important strategic sourcing location for non-food consumer goods, which are playing an increasingly important role in the competition to maintain average retail margins at an international level. Nevertheless, China may not be a market as easily and readily conquerable as foreign FMCG retailers hope.