The commission also reiterated that it is following commitments made to the World Trade Organization (WTO) to lift overseas business restrictions on retail investment by November 2006.

"We should strictly keep to our commitment to the WTO, while making good use of the transitional period to boost the domestic retailing sector," said Huang Hai, director of the SETC's Trade and Market Bureau.

Huang said that during the past few months, many governmental officials at or below provincial levels have requested to allow foreign investment into the local retail sector in a move for more profits.

"But if they are allowed to enter all parts of China, our domestic industry without full preparation will be severely challenged."

Overseas chains entered the Chinese market in the early 1990s. At the moment, only major cities are open to such investment.

According to Huang, overseas investment in supermarkets in China has accounted for 23 percent of the national total.

Multinational retailers, such as Wal-Mart and Carrefour, have already earned a solid market and growth potential in China as their chain stores offer up to about 70 percent of the food and daily necessities for local residents.

SETC figures indicate that China has 645 supermarkets, each of which covers at least 8,000 square meters. Overseas investors have invested in more than 145 of them.

Huang's commission also made public yesterday a supply-demand analysis report for the rest of the year for over 600 major commodities.

According to the report, 88 percent of the commodities are oversupplied.

Retail sales growth will continue to accelerate in China in the remainder of the year, sources with the commission said, adding that the confidence of consumers will continue to improve as the economy sustains steady growth throughout the year.

(China Daily September 25, 2002)