A major reason for the welcoming attitude is that the foreigners, for all their lofty ambitions and deep pockets, remain minor players in a giant market where 1.3 billion people are learning the joys of mass consumption.

"Excessive market share (by a foreign company) is not a concern for the government," said Candy Huang, an analyst with BNP Paribas in Shanghai.

"The biggest player in China currently has only around a five percent national market share," she said.

The foreigners are working hard to become bigger. Earlier this month, British retailer Tesco said it would open 10 more outlets in China this year after its first store in Beijing opened in January.

With a 90 percent stake in Hymall -- a grocery brand under Taiwan-based Ting Hsin International Group -- Tesco now effectively has 45 Hymall stores across China.

Home Depot Inc of the US also recently signed an agreement to buy China-based retailer Homeway's 14 home furnishing stores to better compete with British rival B and Q, which has 52 stores in China.

"Consolidation is definitely the trend," said Huang. "In the end there will be only three or so big players -- but the retail market will definitely not be dominated by foreign names."

Local authorities will not allow foreign players to totally dominate and will support Chinese retailers as they move to improve their procurement and marketing practices to overseas standards, analysts argued.