DAIRY Farm International has forged ahead with plans to expand in China, with a pioneering deal to develop a chain of supermarkets in Shanghai. The establishment of a joint venture to set up Wellcome supermarkets stores indicates a softening of Beijing's stance towards the Jardine group. The Shanghai Wellcome Co, jointly owned by Dairy Farm and Shanghai Textile Raw Materials Corporation, will be the first venture to launch Wellcome stores in China. Dairy Farm's chief executive in Asia, Chris Nelson, said the venture would have an initial investment of US$25 million. Up to 60 stores would be opened in Shanghai within five years. ''The Shanghai Wellcome Co Ltd combines the unparalleled retailing expertise of one of Asia's largest supermarket chains with the distribution skills and financial and human resources of the biggest employer in Shanghai,'' he said. ''This strong combination will, I am confident, ensure that Wellcome supermarkets will become as common in Shanghai within the next few years as they are in Hongkong and Taiwan today.'' Shanghai Textile Raw Materials Corporation is a commercial arm of Shanghai Textile Industrial Bureau, which employs 800,000 workers in 500 factories in Shanghai. Mr Nelson said he believed Shanghai Textile Industrial Bureau was already involved in the retail industry and its transportation and warehousing skills would be helpful to the joint venture. ''Shanghai is the ideal site for the first Wellcome supermarket because it is one of the largest and most rapidly expanding cities in China,'' he said. Mr Nelson was speaking after concluding a feasibility study with Shanghai Textile Industrial Bureau's director Jiang Guangyu yesterday. Wellcome is the Hongkong and Taiwan supermarket operation of Dairy Farm. The group has 1,043 stores.