The government is preparing to allow the establishment of a handful of Sino-foreign joint-venture companies to distribute and retail pharmaceutical products on the mainland.
The move is a further indication that Beijing is moving towards opening the country's most non-competitive sectors ahead of entry into the World Trade Organisation (WTO).
The joint ventures are to be created under the auspices of the State Drug Administration, using trial guidelines issued jointly last year by the State Economic and Trade Commission (SETC) and the Ministry of Foreign Trade and Economic Co-operation.
According to the regulations, large multinational foreign distributors and retailers are encouraged to form joint ventures for the purpose of sharing capital, commercial technology and experience with their mainland counterparts.
The planned joint-venture pharmaceutical partners would be the first comprehensive foreign-invested distribution companies in the country.
Although Beijing has agreed to open up distribution to foreign competition three years after joining the WTO, the government is limiting foreign firms at the moment to distributing only products they manufacture in the country.