China will spur more industries to set up chain outlets in the central and western regions over the next three years.

The State Economic and Trade Commission said the chain outlets, which provide daily necessities under one roof, should be practiced by the petrochemical, tobacco, books and newspapers, pharmaceutical and telecom industries to promote their commodities and services.

This is stipulated in the commission's blueprint for chain operation development in the 10th Five-Year-Plan period (2001-05). The blueprint was issued over the weekend.

In addition to the above-mentioned industries, sectors such as software development, auto sales, commodities leasing, education and training, and tourism could benefit from opening chain outlets.

Expansion would swell the operations of chains in China which began to gain popularity in the early 1990s, said Guo Geping, chairman of the China Chain Store and Franchise Association.

The plan estimates the number of chain stores will reach 100,000 by the end of 2005 with total sales of 700 billion yuan (US$84.57 billion). This is in comparison with 21,000 stores with 155 billion yuan (US$18.72 billion) in 2000, the last year of the Ninth Five-Year-Plan.

The chain companies can transfer their business to the central and western regions in ways ranging from mergers, acquisitions and alliances to introducing trademarks and management, said Guo.

Well-run companies should incorporate existing stores in the middle and western regions into their chain operations rather than open new stores. This will avoid unnecessary competition and resource waste, Guo said.

The blueprint showed China will open the chain store field wider to foreign investors, especially in the middle and western regions.

Regulations are being drafted that will make the current trial opening of commercial industry official, Guo added.

The blueprint will help make the development of chain operation more reasonable and diversified, said Guo.

The blueprint said the government will encourage business to open more convenience store chains and medium-sized supermarkets, but prudence should be exercised over the launch of hypermarkets and warehouses.

Because of the blind expansion of some chain stores, many local enterprises went bankrupt earlier this year.

(China Daily November 19, 2002)