'Made in China' Goods Expect New Market in Global Chainstores

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Last updated at: (Beijing Time) Monday, April 22, 2002

'Made in China' Goods Expect New Market in Global Chainstores

Latest statistics from the State Economic and Trade Commission (SETC) show that the total purchase volume in China of cross-national chain groups reached 30 billion U.S. dollars last year, accounting for 12 percent of the domestic gross exports in the same period.

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Products labeled "made in China" are likely to obtain more opportunities in overseas markets by entering the purchasing systems of international retail chain groups in China.

According to the latest statistics from the State Economic and Trade Commission (SETC), the total purchase volume in China of cross-national chain groups reached 30 billion U.S. dollars last year, accounting for 12 percent of the domestic gross exports in the same period.

Xu Ming, an official with SETC, said that with the severe export situation in the world, the direct supply of "made in China" products to foreign chain groups had become a key channel for their entry into the global market.

In February of this year, the world's largest chain retailer Wal-Mart moved its global purchase center to Shenzhen, a boomtown in south China's Guangdong Province.

In addition to purchasing 10.3 billion U.S. dollars worth of goods from China per year, the center will also buy goods with a sales volume of 190 billion U.S. dollars through its global purchase network.

Carrefour, a world-renowned French retail giant, has set up purchase outlets in 11 Chinese cities, making China its largest purchase base in Asia.

In 2001, Carrefour totally bought 3.5 billion U.S. dollars worth of Chinese-made products, taking up 30 to 40 percent of its gross purchase amount in the world.

As China plans to lower customs tariffs from 15.3 percent to 10 percent in three years complying with the WTO rules, Chinese products, which now account for only two percent of the 1.5 trillion-U.S. dollar purchase volume of the world's top 500 transnational retail groups, will have more opportunities to show up in their purchasing lists.

"The quality and price of 'made-in-China' goods already possess strong competitiveness in the international market," said Zhang Yiguang, manager of Carrefour's purchase office in China.

"With China further reducing customs and canceling export quota limitations, overseas chain groups like Carrefour will have an increasing purchase amount in China," Zhang said.

Starting business with only several hundred yuan in 1986, Tianjin Jinmao Corporation is now the largest manufacturer of caulking guns in Asia with scores of major products.

The turning point occurred to Jinmao in 1997 when the small enterprise traded with the Home Depot chain group of the United States, whose strict demands urged it to make great adjustments in the process flow, management style and quality control.

Currently, Jinmao exports 10 million caulking guns per year, among which 4.8 million sell through the Home Depot. Last year, it reported total exports of 13.2 million U.S. dollars.

"The cooperation with the international chain group has changed the fortunes of our company," said Li Jie, Jinmao's general manager.

Lu Renbo, an official with the development research center under the State Council, considers that the global chain groups are putting more value on China's high-level suppliers, which allows a growing number of domestic enterprises to get effective market information and management expertise through cooperation.

Currently, in various domestic trade fairs, both enterprises producing Chinese traditional embroideries and manufacturers producing Western holiday ornaments are trying to enter the huge purchase networks of the world's chainstore giants.

According to Guo Geping, president of the China Chainstore and Franchise Association, the competitiveness enhancement will enable Chinese enterprises to take the initiative in their cooperation with the foreign chain groups.

To encourage the purchase of "made-in-China" products by multinational commercial groups, the Chinese government is striving to promote "close-contact" between domestic manufacturers and overseas chain groups, enhancing its services such as goods testing and quarantine as well as loans and taxation.

"The government must shoulder the responsibility of transforming its functions after the WTO entry," said Xu Ming.

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