The document discusses China's laws and realities around distribution. It provides an overview of distribution modes like wholesale, retail, direct selling and franchising. It also discusses recent legal texts issued in 2005 and 2006 that give authorities to local governments to approve foreign invested commercial enterprises. It examines specific distribution issues around products like books, raw materials and importation. Overall it assesses that foreign invested commercial enterprises are being treated more like normal companies in China and details will continue to be fine tuned by both private industry and government.