Telecom facilities, motor vehicles and relevant goods remained hotspots of consumption. Of the total wholesale and retail sales above the designated size, the retail sales of motor vehicles was up 68.5 percent over the previous year; telecom facilities, 70.9 percent; household electrical appliances and audio-video facilities, 18.3 percent; and furniture, 28.2 percent.

Commercial conglomerates began to appear. A group of large enterprises with considerable strength came into being in the distribution field. There were altogether 98 distribution enterprises listed in the stock market, and more than 20 commercial and logistics enterprises had their annual sales surpassing 10 billion yuan. At the beginning of 2003, Shanghai Bailian Group was established on the basis of Yibai Group, Hualian Group, Friendship Group and Materials Group. The conglomerate, hailed as the largest "carrier in commerce," had 28 billion yuan in assets and 92.1 billion yuan in annual sales.

The retail industry faced full opening to foreign investment. According to its WTO commitments, China would further open its commercial sector to foreign investment, lifting restrictions on the geographical location, equity and number of foreign-invested commercial enterprises by December 11, 2004. China's commercial sector began to utilize foreign capital in 1992, and by September 2003, the sector had utilized about $3 billion of foreign capital, approving the establishment of 264 foreign-invested commercial enterprises and more than 2,200 branch stores, the majority of which operated in new business formats. Most of the world-famous retailers have entered the Chinese market, and 90-95 percent of goods they sell are made locally. In 2003, the China operations of the French Carrefour accomplished 13.4 billion yuan in total sales, registering a year-on-year growth of 25.7 percent. Carrefour became the top foreign-invested retail company in the Chinese mainland in terms of sales volume and the fifth largest business of chain stores. Wal-Mart, the top of the Global 500, has set up 33 stores in China, with its sales hitting 5.85 billion yuan in 2003. Meanwhile, Wal-Mart purchased large amounts of goods from China, directly or indirectly, for export, the value of which increased from $12 billion in 2002 to $15 billion in 2003.

The catering industry saw noticeable growth of revenue. Despite the outbreak of the SARS (severe acute respiratory syndrome) epidemic, the revenue of the catering industry exceeded 600 billion yuan in 2003, a year-on-year increase of 11.6 percent. In the year, the revenue of the catering industry accounted for about 13.2 percent of the country's total retail sales, about 2.5 percentage points higher than the growth of the total retail sales. In the meantime, catering enterprises sped up their pace of expansion. Among the top 100 catering enterprises in 2003, eight had business volume of over 1 billion yuan and 24 had business volume of over 500 million yuan. Of them, Yum! Brands (China) Investment Co. Ltd. saw its business volume reach 9.3 billion yuan, a year-on-year growth of 31 percent; the Inner Mongolian Xiaofeiyang Catering Chain Co. saw its business volume reach 3.54 billion yuan, a year-on-year growth of 40.6 percent; and the Shanghai Jinjiang International Co. Ltd. saw its business volume reach 2.31 billion yuan, a year-on-year growth of 10 percent.

Foreign-funded enterprises quickened expansion in the catering market. In 2003, McDonald's China Development Co. began to authorize franchised operations in China. Meanwhile, foreign-funded catering groups represented by Yum! Brands and McDonald's expanded their market from large and medium cities to medium and small cities. Of China's top 100 catering enterprises in 2003, five foreign-funded enterprises, including wholly foreign-owned and Sino-foreign joint ventures, had combined business volume of 15.84 billion yuan, accounting for nearly 30 percent of the sector's total volume of business. Statistics show that the Yum! Brands (China), known for such brands as Kentucky Fried Chicken (KFC) and Pizza Hut, had opened 1,130 chain stores by 2003, an increase of 233 over the previous year. Of them, the number of KFC stores exceeded 1,000, with each store's annual business volume averaging 8.3 million yuan, an increase of 330,000 yuan year on year. By the end of 2003, McDonald's China Development Co. had set up approximately 600 chain stores, with each store's annual volume of business averaging 8.8 million yuan.

Basic Conditions of Domestic Trade