Britain's biggest retailer Tesco Plc is in talks over a proposed deal with China Resources Enterprise, CRE to merge their supermarkets and hypermarkets in China.

The move will combine Tesco's 131 stores in China, as well as shopping mall business with CRE's almost 3 thousand stores.

Under the proposed deal the state-owned Chinese conglomerate will control around 80-percent of the venture, while Tesco will take the other 20-percent.

At this point both parties say there is no guarantee a deal will be reached.

Tesco, which is the world's third-largest retailer, has been operating in China since 2004.

Last year it closed four stores and another this year.

Tesco's isn't the only international chain flagging in the Chinese market, French supermarket chain Carrefour shut two stores and U.S retail giant Walmart shut five of it's stores last year.

Earlier in June rumour circulated suggesting Carrefour was considering selling its Chinese business.

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