China - Domestic trade



Three types of retail trade outlets—the periodic market, the peddler, and the urban shop—constituted the basis of the traditional commercial structure. In the early 1950s, however, a number of state trading companies were established for dealing in commodities such as food grains, cotton, textiles, coal, building materials, metals, machinery, and medicines. These companies, under the control of the Ministry of Commerce, have established branch offices and retail stores throughout the country.

In the 1960s, the establishment of state-owned department stores and cooperative retail outlets virtually replaced private trade. There was a resurgence of periodic open markets and private traders when domestic trading regulations were relaxed in 1978. In addition, the government has progressively loosened or eliminated many of its former price controls; an estimated 90% of all retail sales are no longer controlled.

In 2001, 50% of the work force was employed in agriculture, keeping the country basically self-sufficient in grain production, even though only about 13% of the land is arable. Farmlands and the agricultural industry, however, remain under state control.

The China Export Commodities Fair, usually held each spring and fall in Guangzhou, was for more than 20 years an important point of contact for Westerners doing business with China. Though still important as an initial introduction to the full range of China's potential suppliers, the decentralization of trading activities in recent years has greatly reduced the fair's role in mediating sustained contact between producers and buyers. Local foreign trade commissions in various industrial centers of the country have taken on a much more active role in organizing many of the services associated with the commodities fair, while any domestic enterprise with foreign trading rights may now participate directly in all events related to trade promotion. Guangzhou still hosts two annual trade fairs, though on a reduced scale. In the major cities, Friendship Stores and other restaurants, hotels, service bureaux and taxis cater exclusively to foreign visitors; payment is made in foreign exchange certificates.

By the mid-1980s, international credit cards could be used to obtain cash advances in selected outlets and for direct purchases in Friendship Stores. Some Internet commerce took place in China after 1998.

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