Foreign retailers face curbs on expansion plans

New rules currently under review by the State Council on large-scale shopping outlets could impede expansion plans by foreign retailers such as Wal-Mart and Carrefour.

Under the draft rules, big retailers will be required to file detailed blueprints of their commercial plans, including plans for department stores, big supermarkets and other retail outlets in residential areas. Public hearings on the impact on the communities will be required for retailers applying to build outlets larger than 10,000m². The hearings would include a panel of regulators, industrial associations, academics, competitors and representatives of local residents.

If the proposed rules are finalized, foreign and local retailers could face increased project costs, such as if the local government requires the retailer to put in a pedestrian tunnel to ease traffic flows. On the other hand, the proposed rules could help preserve local neighbourhoods if the public hearings are effective, and also curb waste of consumable products. In recent years, many of the world's largest shopping centres have been built in China, but despite drawing huge crowds of visitors many have not been able to convert the numbers into sales, according to retail executives.