UK leading supermarket chain Tesco is to expand the world's largest market - China.

The Asian nation has the highest population in the world - in excess of one billion people - and has cities as large or larger than London, such as Beijing and Shanghai.

The multiple, one of the UK's biggest firms, will begin preparations on its first store next year.

The new outlet will be in the southern province of Guangdong.

The company is a late entrant one of the most attractive markets in the world - French giants Carrefour and US big boys Wal-Mart are already enjoying life after Chinese communist chiefs made significant concessions to free market capitalism.

France's leader has opened 27 stores in the giant country and has become China's second largest retailer.

Wal-Mart, still someway behind on 15 stores expects its purchases to rise to $5 billion this year.

In spite of economic reform, foreign retailers are barred from having total control of mainland operations.

Foreign retailers must find Chinese partners – typically state-owned - in order to set up shop in the country.

To get around this, Tesco had been in talks with state-owned trading company Sinochem, until the discussions broke down amid Sinochem concerns of lack of both resources and retail experience.

The search continues.

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