The deal has received government approval and is expected to establish a presence for Best Buy through 193 Five Star's stores in eight Chinese provinces.

According to the agreement, Five Star's management will stay in their current positions and its stores will continue to use the Five Star brand.

Expecting China's consumer electronics sales to hit 100 billion dollars by 2010, Robert Willett, chief executive officer of Best Buy International, said Best Buy is pleased to enter China's retail market with Five Star's management team as its partners.

"This relationship complements our other efforts to learn about the Chinese retail environment," he said in a statement. "In addition to our new work with Five Star, we are moving forward with our plans to open our first Best Buy retail store in China this year."

The world's largest electronics giant has some 940 retail stores across the United States and Canada and annual sales of more than 300 billion dollars. It already has three offices in China.

Wang Jianguo, chairman of the Five Star board of directors, said, "We believe that we can continue to enhance our customers' experience as we benefit from Best Buy's expertise in retail operations, IT and supply chain."

Five Star was founded in 1998 as a wholesale business and opened its first retail store in East China's Nanjing city in 2001. It has more than 12,000 employees.

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