China's largest retail chain, Lianhua Supermarket Holdings, has received approval to form a distribution firm in Belgium with two overseas mainland-invested firms. Lianhua, which will become the first mainland retail chain to venture into the European market, plans a two-prong strategy where Chinese-made products will be distributed in Europe and European goods brought into China. This could set Lianhua on a collision course with big foreign rivals such as Carrefour and Wal-Mart that have operations in China. A public relations firm hired by Lianhua said the company had received approval from China's foreign trade ministry. It refused to give details of the shareholding structure or the amount of investment, but it is understood the firm will be a Lianhua subsidiary. Lianhua chairman Wang Zongnan earlier said the venture would not require much investment. At home, Lianhua plans to expand rapidly to counter growing competition. Mr Wang had said the company was on a fast expansion track to maintain market dominance, which would be achieved through mergers and acquisitions. Its recent Hong Kong listing added about $580 million to its war chest. This year, it plans to open 20 mainland hypermarkets, each with a start-up cost of about 22 million yuan (HK$20.62 million). It will also add 280 supermarkets - 200 of them to be franchised out to other operators - launch 300 convenience stores and franchise out a further 400.