Distribution and logistics development in China: The revolution has begun

Prior to the economic reform movement, China’s centrally planned, three‐tier system dominated the distribution sector. After the 1980s, this system gradually shifted away from the socialist mode to the free market mode. Today, China’s distribution system lies somewhere between these two modes. Since the reform, China’s government has been encouraging export‐oriented foreign firms’ investments in free trade zones along the coast. Foreign firms do not enjoy the same inland distribution and logistics rights as their Chinese counterparts. However, the distribution puzzle is not only faced by foreign firms, but also by Chinese firms that operate nationwide. China’s undeveloped infrastructure, government regulations, and regional protectionism fragment distribution channels throughout China. However, there are three main forces that are changing and modernizing China’s distribution and logistics system. These are the booming economy, entering the WTO and e‐commerce. The inevitable revolution of China’s distribution and logistics system is on the way.