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The Structural Change of China`s Distribution System and Korea`s Entry Strategies

Author Shin,Tae Yong Date 1997.06.01 Page 0
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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 know-how. 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.