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 refo rm policies were reinforced by the report made by Jiang Zemin to the F ourteenth Congress of the Chinese Communist Party in October 1992. See king to pave the way to readmission to GATT, the Chinese government ha s also introduced a number of changes in its distribution systems. Thi s article traces the development of the distribution system in China f rom a state monopoly to a limited participation foreign venture, and w e examine the common problems faced by foreign investors in managing t he distribution channels in this transitional period. The ways that co mpanies have dealt with these problems are reported to provide useful insights to prospective foreign investors.