MOFCOM Department of Market Operation Regulation and Research Institute of Market Economy of DRC released 2005-2006 Report on China's Circulation Industry Development recently.

　　The Report pointed¹ out that circulation industry was a leading industry of China's national economy. In 2005, while making important contribution to the economic development, circulation industry enhanced the competitiveness: 1, scale maintained enlarging, total retail² sales of consumer goods actually increased by 12%, sales of production material by 16.2% and import and export by 23.3%; 2, efficiency improved step by step, added value in retail sales and wholesales³ of catering⁴ went up by 11.4%, value-added tax, sales tax and income tax paid up by 17.7%, profit of major enterprises engaging in wholesales up by 9.8% and of key retails⁵ sales enterprises by 8%; 3, structure maintained optimizing⁶, technology and management of traditional industries were improved gradually and development of new industries further expedited. Gap between eastern, central and western China narrowed and difference between urban and rural areas was improved.

　　According to analysis, development of circulation industry in the Eleventh Five-Year Planning was obvious and commodity market achieved coordinate⁷ and high-speed development. On one hand, in the process of the economic development, circulation industry further presented its importance, consumption decided⁸ production through circulation. Governments at all levels sped up the legal construction, strengthened support of policies and capital investment, and improved the infrastructure⁹ construction and business environment of circulation to push forward the development of the industry. On the other hand, circulation industry positively¹⁰ adapted itself to the change of situation, transformed the management concept, actively¹¹ applied¹² advanced and practical technology and expedited the reform of outdated¹³ management facilities to strive to provide high-quality service for production and consumption.

　　The Report made a projection¹⁴ on the development of circulation industry during the Eleventh Five-Year Planning. In which, circulation industry faced with not only favorable development opportunities but also the heavy mission to expand consumption, to revitalize the market and improve people's living standard.

　　1, Led by the market, Chinese economy entered into the period of new growth on the basis of upgrade of consumption structure and autonomous¹⁵ investment of enterprises. The great-leap-forward development of industrialization, urbanization, marketlization and internationalization in the Eleventh Five-year Planning end even longer period will offer sustainable growth power for social and economic development and promote the new development pattern of Chinese circulation industry.

　　2, Governments at all levels put forward and implement¹⁶ the Eleventh Five-Year Planning, and draw up special program against circulation area for the first time, which described the grant blueprint¹⁷.

　　3, We pushed forward the building of new socialist¹⁸ rural areas and the development of community commerce in urban areas to further promote the Development of West China and maintain fulfilling the strategy of Revitalizing Northeast China and Other Old Industrial Bases so as to positively promote the Rising of Central China, which was beneficial for the coordinate development of circulation industry between rural and urban areas, eastern, central and western areas.

　　4, We expedited the modernization¹⁹ of facilities and equipment of circulation industry, adopted more advanced management, technology and approaches, sped up the establishment of proprietary²⁰ brands and further improved competitiveness.

　　5, Governments at all levels attached more importance to the development of circulation industry, put forward and implemented²¹ various policies and measures, reform experimentation²² of circulation system was expected to have a breakthrough, institute environment of development tended to be improved and market order was further optimized²³.

　　Regarding to development tendency of circulation industry in 2006, the Report pointed out that Chinese economy would maintain the tendency of fast and steady growth with a rate of about 8%, which provided an extensive market space for the industry to develop rapidly and steadily²⁴. It is predicted that total retail sales of consumer goods in 2006 will increase by about 13%, RMB7.5 trillion more compared with 2005, total sales of production material will rise by 12%, RMB15.5 trillion more than that in 2005, and import and export will go up by 15%, RMB1.6 trillion more than that in 2005.

　　The Ministry²⁵ of Commerce highly stressed the development of circulation industry since its establishment. MOFCOM Department of Market Operation Regulation and Research Institute of Market Economy of DRC began to draft and promulgate²⁶ the Report on China's Circulation Industry Development in 2005. The newly drafted annual report on development from 2005 to 2006 not only summarized the development situation of circulation industry in the past one year but also prospect and predict the development in 2006 and even the Eleventh Five-Year Planning

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