Foreign Retail Enterprises in China

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Foreign retail enterprises began trickling in as early as 1992，and over 350 such enterprises were operating by 2000 under various local sanctions，but only 40 of them had gained proper approval from the central government.A crackdown followed，presumably in anticipation of WTO entry，requiring foreign investors to conform to a set of trial regulations passed in 1999.These regulations limited investors geographically to capitals and single-city administrative regions and set tough requirements on assets and profitability.

Regulations were again changed on WTO entry with the unveiling of a new plan fo the retail sector’s transformation.These rules initially stipulated even more constrictive geographical limits，minority partnership for foreign firms in joint ventures with domestic enterprises，and limits on the number of ventures and theirbranch networks.After two years，these constraints were softened and have now been dropped completely.

The world’s two largest retailers，Wal-Mart of the US and Carrefour of France. Both endured hard times for nearly a decade following their debuts in China.

Carrefour，China’s largest foreign retailer with over 100 stores open to date，sa its first profitable year as late as 2003.That same year，Wal-Mart was still reporting net loss，having done so consecutively each year since its introduction to China in 1996.

With restrictions eased，these two giants and other foreign firms all have big expansion plans.Wal-Mart alone plans to open more than 20 new stores in 2006.Theforeign influx underway may be the biggest overhaul of the Chinese retail market ever，with unpredictable results.