The Structural Change of China`s Distribution System and Korea`s Entry Strategies
The reform of China`s distribution system and Korea`s
strategies for launching into the Chinese market
by Tae - Yong Shin
Recently China recognized the importance of distribution for the efficient
allocation of resources which is essential to activate the Chinese "socialist
market economy". Since 1979 China has made continuous efforts to reform
retail and wholesale systems to make them adapt to the market mechanism.
State-owned monopolistic distribution channels have already changed to
competitive and diversified channels, and in this process individual
entrepreneurs and the private sector played a decisive role.
But in spite of the introduction of competitive factors in the distribution
system, it has still many problems. For example, many big state-owned firms
could not properly adjust their management style, and new emerging types of
retail and wholesale trades lack well-trained personnel and managerial
Thus, the modernization of the distribution sector is one of the most
important and urgent tasks in the Chinese economy faces to enhance economic
efficiencies. To cope with this problem, the Chinese government already
decided to open her retail trade to foreign firms in 1992, to utilize their funds
and advanced management skills. Since then, well-known retail firms from
Japan, Taiwan, Hong Kong, the United States, France among others, have
launched actively into the Chinese market and opened their shops in large
cities all over China.