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China-MARKET ACCESS


Distribution


Formerly dominated by a State controlled system, the rules governing the management of trade are not well structured in China. The main business areas in the country are located around Shanghai, Beijing, Guangzhou and Hong Kong. Hong Kong will maintain its status as a free-trade port for 50 years from the date of reunification with China. In fact, it is the preferred port of entry of goods into the Chinese market of 1.3 billion consumers.


The Business to Consumer (B to C) market


Disparities exist between the urban and rural areas in China: 75% of the sales area is concentrated in the Eastern part of the country. In addition, one also notes differences between the urban and the rural population: whereas the former has a per capita income of 800 US dollars, the latter has an income of only 270 US dollars.

Retail distribution is well-developed in large cities and towns; hypermarkets are growing strongly in the majority of large Chinese cities and reached 39,089 in 2003. The mass market is dominated by large Asian groups such as Shanghai Bailin which has 5,000 points-of-sale with a sales turnover of 6.8 billion euros. However, foreign groups have also successfully settled in China such as Carrefour which is the 5th largest distributor in China and opened its 65th hypermarket in September 2005.

Other main hypermarkets in the country are: Wall-Mart (55 points-of-sale and sales turnover of 307 million euros), Tesco and Park'n shop.

In the rural areas, traditional trade is still of considerable importance because foreign firms are not yet established there.

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The Business to Business (B to B) market


In order to sell in China, it is best to have a specialized agent having good institutional relations. If an export company wants to have a large trade volume in the country, the opening of a representative office in China should be considered. In fact, the Chinese government incontestably wants to have more and more foreign companies and encourages them to set up representative offices; that being the first stage towards setting up in China. However, setting up of a company in China is still subject to a process of surveillance under the control of the official authorities.

The other difficulty is to get the various permissions & certificates to enter this market: in fact, companies often get permission from local authorities but not necessarily from the central authority. Because of this, Carrefour had to give up some of its stores to its competitors.

Since joining the WTO in 2001, the Chinese government has opened its doors to foreign firms, and as a result, has attracted more than 34 billion investment dollars in 2004, a growth of 150% as compared to 2003. In addition, the government adopted a law on 1 June 2004 allowing companies create their own chains stores.




Transportation of goods


By road


The road network, with a density of only 1,010 km of roads for 1 million inhabitants, is one of the recurrent issue that explains the slow-paced development of the Chinese economy. Moreover, the existing infrastructures, often badly conceived and of poor quality, are usually blocked by badly repaired vehicles (cars, lorries, cycles, carts .).
One of the priorities of the Chinese authorities since 1980 has been to develop the Chinese road network which covers 1.34 million km of roads today among which only 11,000 km of ways allowing speeds above 120 km/h. The secondary (paved roads) and local ways represent respectively 25 and 61% of the total network.
The current efforts from the government are especially concentrated on the implementation of the National Trunk Highway System (NTHS), system of inter-provincial toll motorways including 12 corridors on 35,000 km. This network, which construction is planned over thirty years, should enable to connect 95 cities of more than 500,000 inhabitants. At the same time, the governmental body which is in charge of the road construction at the national, provincial and municipal level began to improve the quality of infrastructures and their management.


By rail


Despite the Chinese governments' efforts to develop other means of transport, railroads remain the main one and the least expensive solution for long distance freight. In 1997, among all transport means, railroads collected 50% of the tonnage kilometres and more than 40% of the passengers kilometres of the country. The network covers 61,212 km, mostly concentrated on the oriental part of the country.
The main operator is the "Ministry of Railways" which takes on the exploitation of the network and the management of all the railway projects.


By sea


The biggest port is Shanghai: it includes three-quarters of the sea transport in 1995 and its infrastructures have been developed. In 1994, a port of containers began to operate in Shenzen, the special economic zone close to Hong-Kong. The main ports of the country are: Dalian ( Northeast), Tianjin and Qingdao (which serves Beijing and the North of China); Shanghai (East), Guangzhou, Shenzen and Xiamen (which serves Southern China).
The British Ocean Shipping Consulting Company forecasts that Chinese transport by containers will rank first in Asia in the 15 years to come.


By air


China ranks 9th in the world regarding the total distance of its transport flights (85.7 billion km). Within 20 years, this figure should improve by 8.5 % a year to reach 438.7 billion km in 2019. Chinese air freight considerably developed since the country opened its borders and since civil aviation reforms were initiated. In 1998, the volume of cargo and mail transport reached 1.4 million tons, 25 times more than in 1978, that is an average annual growth of 19.8% over this period. Since 1997, the 13 most important cargo companies taped the Chinese market (Air France, FedEx, Korean Air, Singapore Airlines...) and wish to increase their flights frequencies on China.
The main international airports are: Beijing, Guangzhou Bayiun, Shangai Hongqiao, Chengdu, Shenzen and Xiamen.
The main airlines are Air China, China Airlines and China Eastern. Domestic flights are ensured by China Xinhua Airlines
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Standards

 


Patents and brands

Texts currently applying to patents/brands

  Text Date entered into law Period of validity Comment
Patent   Munich Convention   -   -    
Trademark   Madrid agreement
Nice agreement  
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