Melody Pand

In early 2022, China’s top economic planner, the National Development and Reform Commission, unveiled plans for establishing a modern distribution system by 2035. The plans aim to cut distribution costs and enhance distribution efficiency in six major areas including commercial distribution, logistics, and domestic and international distribution networks.

The pilot program aims to prioritize cities with a strong foundation for work, a solid driving force, and great potential for development. The goal is to build cities that integrate urban and rural development, have strong radiation effects, and provide reliable supply chains. The pilot program is closely linked to the country’s major regional strategies, main logistics lines, and modern industry clusters.

The first batch of cities includes Tianjin, Shijiazhuang, Dalian, Harbin, Shanghai, Hangzhou, Ningbo, Hefei, Fuzhou, Xiamen, Nanchang, Jinan, Qingdao, Zhengzhou, Wuhan, Guangzhou, Shenzhen, Chengdu, Xi’an, and Yinchuan. The central government will provide financial support to the selected cities.
In April this year, the Ministry of Finance and the Ministry of Commerce jointly issued a work plan about selecting cities with a sound foundation to pilot the modern commercial distribution system starting this year.

China has worked out plans for a modern distribution system over the 14th Five-Year Plan period (2021-2025), aiming to facilitate improvements in the flow of goods and resource factors; commercial and logistics facilities; domestic and international distribution networks and service systems; transportation capacity; financial support; emergency response; and green development.
According to the plan, by 2025, China expects distribution costs to decrease and the modern distribution system to become more efficient, meaning the sector will play a more important role in the economy.

The modern distribution system is projected to be completed by 2035, placing China among the leaders in terms of distribution efficiency and quality and providing efficient support for developing a modern economic system.

Shenzhen one of the 20 chosen cities, with a mature commercial distribution sector, boasts more than 2.1 million wholesale and retail entities, 80,000 logistics firms, more than 40,000 export companies, and more than 4,000 supply chain companies. Included among them are well-known names such as BYD, Aisidi, Rainbow, and Comix. Four of Shenzhen’s wholesale companies have seen their annual sales exceed 100 billion yuan (US$14 billion), while 32 have realized sales of over 10 billion yuan annually.
Last year, the city’s retail sales reached 1.04 trillion yuan. Its foreign trade totaled 3.87 trillion yuan, with exports ranking first among Chinese cities for 31 straight years. The output of the city’s transport, storage, and postal sector reached 97.984 billion yuan, and the shipping throughput of the airport reached 1.6 million tons.