China Wednesday launched a national campaign to revive the domestic market by forging closer ties between the industrial and commercial sectors.

The move is expected to lead to increasing retail sales, which had already been below the set growth rate of 9 per cent, and also help form a stable co-operation between the industrial and commercial sectors, which will benefit their long-term development, said Vice-Minister of Commerce Zhang Zhigang.

It is the first time the Ministry of Commerce has organized such a market exploration campaign, according to Zhang.

"The rare action comes after the fact that the SARS outbreak has had a great impact on domestic consumption, one of the three major driving forces for the country's economic development,'' Zhang said.

For the first half of this year, retail sales rose a year-on-year 8 per cent to 2,155.6 billion yuan (US$259.7 billion).

The rate is slower given that the targeted annual growth rate is 9 per cent year-on-year.

"The second half of this year is key to us to realize the 9 per cent target,'' Zhang said.

"Obviously, an over-9-per-cent rate in the second half of this year is necessary, but needs hard work to achieve,'' Zhang said.

As a result, the ministry came out with the unusual move, aiming to revive the market as soon as possible in the remaining four months of this year.

The expansion of domestic consumption is key to creating demand for investment and jobs, Zhang said.

Over 120 prestigious Chinese industrial enterprises and commercial companies, including Haier, the Beijing Wangfujing Department Store and Shanghai Bailian Group, agreed yesterday to promote the market through a closer joint work.

These companies promised to have a smooth communication, simplify supply procedures and conduct joint negotiation.

They will also conduct a series of promotion activities, including exhibitions and trade fairs.

The ministry will support 15 national trade fairs in the remaining four months of this year.

The ministry is also looking at other measures to expand consumption, such as spreading the campaign to the agricultural and banking fields.

The ministry's move received warm response from the companies which believed the campaign is very timely.

Yang Chuan, president of the Tianjin Hualian Department Store Co, said the campaign is vital for the retailing market which suffered from the SARS crisis.

"The campaign will not only increase sales, but also try to establish an efficient and orderly relationship between the industrial and commercial sectors,'' Yang said.

Liang Shaoping, a manager from the Zhejiang Nice Group, said co-operation between the industry and commerce in China is not as close as that in developed countries, which hampers their mutual development.

In United States, the manufacturers will tell the retailers what the market trend is and retailers can help manufacturers to design the products, which helps cut costs, according to Liang.

"But such co-operation in China is very limited and we look forward to seeing more of it,'' Liang said.

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