Introduction
Prior to the economic reform movement, China’s centrally planned, three-tier system
dominated the distribution sector. After the 1980s, this system gradually shifted away
from the socialist mode to the free market mode. Today, there are three main forces that
are changing and modernizing China’s distribution and logistics system. These are the
booming economy, entering the WTO and e-commerce. While great changes have been
made, China’s distribution system still lies somewhere between socialism and freemarket
capitalism. This paper addresses issues of interest to firms wishing to distribute
good throughout China. It provides a historical structure for viewing distribution and
logistics in China as well as providing a snapshot of current problems facing firms
expanding operations there. Finally, it provides a synopsis of lessons learned by firms
currently operating in China as well as views of future trends.
2.0 China’s