Distribution Reform in China: An Analysis of the Private Sector Development

The distribution system in China has been undergoing rapid changes since the implementation of the economic reform in late 1978. The relative performance of the major players in distribution, namely state enterprises, collective enterprises and private businesses has had significant changes. The private sector has been the winner in terms of market share and efficiency. In addition to the entrepreneurial spirit and operational efficiency of the private sector, argues that there are two other important factors accounting for its success. The first determining factor is the relaxation of government policy which has legalized and fostered the development of the sector. The second factor is the change in consumption patterns during the reform. Less staple food but more consumer goods and services are purchased than in the past. These change have further contributed to the booming of the private sector in the distribution system.