The Chinese Government is drafting new rules designed to regulate the growth of large-scale retail outlets, The Wall Street Journal has reported citing anonymous industry executives.

Under the plan, cities would have to file detailed blueprints of commercial plans, including proposals to develop new department stores, supermarkets and retail outlets in residential neighbourhoods. A public hearing would be held to consider applications to build stores larger than 10,000 square metres.

The rules would apply to both domestic and foreign retailers, but are thought to favour Chinese groups, who have lobbied to have the perceived favouritism of local governments towards foreign retailers addressed.

This increase in levels of bureaucracy and red tape would likely increase expansion costs for big retailers.