Foreign invasion 'is all in the mind'

The impact of the so-called foreign invasion into the mainland's retail business is more psychological than real, a government economist said yesterday.

'At the moment, China's opening of its commercial sector has not reached the alarm level,' said Wang Hai, of the State Internal Trade Bureau.

'The retail market is still operating entirely within the green-light zone.' Mr Wang made the remarks in Shanghai yesterday when he addressed a seminar on the mainland retail market, Xinhua reported.

To support his claims, Mr Wang said although many foreign retailers had set up shops in China in recent years, together they represented less than 0.1 per cent of the total number of retailers. In terms of business volume, they accounted for only about two per cent of total sales.

Mr Wang said even in cities like Shanghai and Shenzhen, where foreign businesses were most concentrated, they still accounted for less than 10 per cent of the market share.

Since mainland and foreign retailers were competing on 'different levels', foreign retailers represented more psychological than real pressure on domestic retailers, said Mr Wang.

China would only open its retail market in stages, and gradually, after it was allowed to join the World Trade Organisation, because such an approach dovetailed with China's national conditions and was in line with international practices, he said.

Mr Wang's comments appeared to be aimed at domestic critics who have charged that the Government has conceded too much in the WTO negotiations.