Distribution in China : A guide through the maze

Since the establishment of its new economic policy in 1979, China has been transforming itself from a seller's to a buyer's market. The reform policies were reinforced by the report made by Jiang Zemin to the Fourteenth Congress of the Chinese Communist Party in October 1992. Seeking to pave the way to readmission to GATT, the Chinese government has also introduced a number of changes in its distribution systems. This article traces the development of the distribution system in China from a state monopoly to a limited participation foreign venture, and we examine the common problems faced by foreign investors in managing the distribution channels in this transitional period. The ways that companies have dealt with these problems are reported to provide useful insights to prospective foreign investors. © 1995.