China is currently working out rules to regulate fast-growing chain stores in an aim to regulate the relationship between suppliers and retailers and to put a stop to “blind” expansion.
Chief of the State Economic and Trade Commission (SETC) Huang Hai said some chain stores expanded “blindly” without having the necessary capital, obtaining products from suppliers in advance and being forced to close due to a lack of money.
The SETC wants to raise the amount of paid-up capital that is needed to register a store, in order to prevent any badly run chain stores from opening.
The SETC also wants to prevent retailers from charging suppliers excessive fees to sell their products and delaying payment to suppliers.
International retail giants Wal-Mart and Carrefour are both planning to open new stores in China, reported the South China Morning Post.