A recent report by market analysts TNS Retail Forward has forecast that China will surpass Japan as the second largest retail market by 2012, with market value rising to over US$1.4tn - only the US market is valued higher.

In the group's latest report, titled China's Retail Landscape, TNS assessed the country's retail landscape, profiled the country's leading retailers and analysed consumer trends.

Despite projected inflation as well as increased government emphasis on food safety and environmental regulation, the group said that a continued influx of new retail banners and continued aggressive expansion would boost the retail outlook in China.

'While China's short-term retail outlook is vulnerabal because of pressure ranging from inflation to heightened government regulation, the continued entry of new retail banners is evidence that China remains one of the best retail opportunities in the world, with strong growth forecast across all categories,' said Frank Badillo, senior economist and manager of the group's global retailing programme.

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