Wal-Mart expands Chinese business
Wal-Mart, the world's largest retailer, is expanding its presence in China after agreeing to buy a 35% stake in discount store chain Trust-Mart. The terms of the deal, giving Wal-Mart an interest in 100 stores in 34 Chinese cities, were not revealed but analysts have said the business is worth $1bn.
Should Wal-Mart ultimately buy out the group, it would make it China's largest foreign retailer in terms of stores.
Foreign sales currently account for about 20% of the firm's turnover.
Based in Taiwan, Trust-Mart was set up in the mid-1990s and has more than 30,000 staff.
'Important step'
 |  We have the opportunity to expand our presence in China, one of the world's fastest growing markets  Michael Duke, Wal-Mart |
Along with other leading global retailers like Carrefour and Tesco, Wal-Mart is looking to build its interests in China's fast-growing retail sector.
The firm already operates 68 stores there and said last year that it was prepared to hire an extra 150,000 staff in the next five years.
Wal-Mart said the latest deal was an "important step" for the business.
"Through this investment in Trust-Mart we have the opportunity to expand our presence in China, one of the world's fastest growing markets," said Michael Duke, Wal-Mart's vice-chairman.
Wal-Mart said the two companies would, for the time being, operate independently but that if "certain conditions" were met, it could buy out the remainder of the business by 2010.
Mixed record
Wal-Mart's efforts to expand outside the US have not proved an unqualified success, raising questions about whether its retail formula can be replicated elsewhere.
The firm pulled out of Germany and South Korea after struggling in those markets, while its Japanese subsidiary Seiyu has made heavy losses.
The US firm is currently looking to develop a joint venture business in India, a plan which has sparked protests by small shopkeepers.
Carrefour is currently the leading foreign retailer in China, with 90 hypermarkets.
Tesco opened its first own-brand store in China last month, and has interests in another 45 outlets through a joint venture with a domestic retailer.
China's retail sector was worth nearly $850bn in 2005 and is forecast to grow to more than $2 trillion by 2020.
