The objective of this book is to develop a model for analyzing the relative importance of facilitating and constraining factors that determine channel length. Identifying and explaining the factors that influence channel structure is one of the most important tasks of channel research. The focus of this paper is The People's Republic of China (hereafter, PRC). The PRC is in transition from a planned to a market economy. As the economy evolves from a planning orientation to a market orientation, distribution structure reform is a critical factor in this process. Retailing and distribution structures of developing countries have been the subject of a number of studies, the objectives of which have varied significantly. However, an examination of the literature devoted to the evolutionary process of distribution structures shows little progress in theory development. Very little is known about the factors that shape a nation's channel system. Understanding how improvements in distribution systems contribute to economic development can aid decision-makers in developing countries to improve resource allocation.