China Retailing in Transition-A Dynamic and Evolutionary Perspective

The process of deregulation to the economy is one important strand, where politics and economics meet. However, the interaction between regulated policy and economic development and the issue on how a. government's ideological intervene might impact on the transition of economic system have been neglected. This purpose of this paper is to study the transition of retailing in China. Transition is defined as an evolutionary process that concerns with ongoing and irreversible changes in time, and the process vacillated with non-equilibrium and non-optimal variations driven by external and internal forces. In this study, three driving forces-government mediation, managerial effectiveness, and the market environment-are identified to evaluate China's retailing evolution after the 1978 economic reform. The result suggests that elements associated with governmental mediation have the strongest impact to direct retailers' operating formats. This provides a framework to explain the emergence of different retailer ownership formats and identify several crucial factors that may influence the future retail business in China.