Abstract
The Chinese distribution system is markedly different from its American equivalent. The bulk of the nation's products, especially producers' goods, are allocated according to the state plan and distributed through state-controlled channels and facilities. As most of the products are purchased by the state there would appear to be no need for sales marketing; the primary function of the distribution system is merely to handle the physical flow of goods. However, goods are often in short supply. Therefore, to ensure an adequate supply of inputs to fulfil the production quotas, numerous purchasing agents are used to locate the necessary inputs for enterprises. Basically, the commodity flow is pulled by the buyers rather than pushed by the sellers. This supply insufficiency leads to many problems, including commodity hoarding by users and producers alike. Consequently, the level of idle inventory is unnecessarily high and the size and speed of the commodity flow reduced.
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