Tesco takes first step into China

SUPERMARKETS giant Tesco has finally launched its first move into China, the world's largest market after a three-year hunt for a partner.

The grocer will spend £140m on a 50% stake in 25 Hymall stores, owned by Ting Hsin, China's largest food maker. The deal makes Tesco the latest in a long line of Western companies seeking new business opportunities in the country where the economy is estimated to be growing at more than 10% a year.

Retail giant Wal-Mart Stores already has operations in China, while French retailer Casino has said it could benefit from entering China as well.

'China is one of the largest economies in the world with tremendous forecast growth and a market we have researched extensively over the last three years,' said Tesco chief executive Terry Leahy.

International expansion forms a key part of Tesco's strategy.

Along with opening more convenience Tesco Metro stores in its main UK market, Tesco has also expanded rapidly in areas such as Asia and central Europe and the company has said it aims to overtake Wal-Mart as the world's biggest retailer.

It operates in 11 countries outside Britain, including Japan, Thailand, South Korea, Taiwan and Malaysia and several European countries. It employs 326,000 people worldwide and operates 2,318 stores.