Foreign investors to flood market

Foreign investors are lining up to buy into the retail and logistics sectors as China's accession to the World Trade Organisation ensures the easing of restrictions.

DTZ Debenham Tie Leung consultancy director Mary Seddon said: 'Large shopping malls are being developed in the country's prime retail destinations - Beijing, Shanghai and Guangzhou - in anticipation of the flood of foreign retailers looking to enter the market.'

Ms Seddon said trading was restricted to designated Special Economic Zones such as Shenzhen, Shantou, Zhuhai, Xiamen and Hainan, while trade would be carried out through joint ventures with a local partner in Beijing, Shanghai, Tianjin, Guangzhou, Dalian and Qingdao.

Restrictions would be lifted by 2004 on foreign ownership in franchise stores and, by 2007, foreign majority ownership of chain stores would be permitted, she said.

'The amount of floor space coming on to the market, particularly in some of China's key markets, will almost certainly bring this point home to some developers,' Ms Seddon said.

She expected large general merchandise stores to eat away at the market lead of department stores for the next five to 10 years because they had already taken over department stores in Shanghai and Shenzhen, and would soon gain a hold in Beijing, Guangzhou, Dalian and Wuhan.