Tesco is looking to divert the bulk of its capital investment over the next 12 months to China, the UK retail giant's chief executive said today (6 October).

Sir Terry Leahy earmarked China as a market set for investment when he outlined Tesco's internatiuonal plans at the retailer's interim results presentation in London.

"At the moment, we're looking at GBP500m (US$796.4m) [of investment] over the next year in China," Sir Terry said.

Tesco has 66 stores in China and last week secured a lease on a store in Dongying - one of the country's so-called "third-tier" cities.

The company is also trialling its Express format in the north-east of the country and said today that it is looking to open 19 hypermarkets in China this year.

Tesco is competing with the likes of Wal-Mart and Carrefour in China, as well as domestic chains including Wumart Stores.

Last week, reports in France said that Carrefour's largest investors  - Colony Capital and Bernard Arnault - were placing the French retailer's management under pressure to sell-off its operations in emerging markets like China.

However, Tesco finance director Laurie McIlwee talked up his company's investment plans for China, including in the country's "tier-three cities".

"China defines these cities as tier-three but they've actually got populations over 1m people," McIlwee said.