Tesco, which said last November it planned to open 15 Malaysian stores in five years, has opened two since then.
Carrefour has six stores in the country so far.
Carrefour won't pull out of Asia or stop expanding there, said Christian D'Oleon, a company spokesman. He said while it's "understandable" that governments react to protect smaller businesses, growing demand for food safety and lower prices means the market for larger international stores is still there.
Asia is "incontestably an important region" for Carrefour's future growth, he said.
In China, the government promised foreign retailers more market access when it joined the WTO last year. Yet they still need permission from both local and national governments for new stores and have limits on what they can sell and how many stores they can open in each city.
They also need Chinese partners to tap into a US$450 billion retail market.
Carrefour was ordered by the government earlier this year to reduce stakes in its 27 China stores to end a 16-month dispute that threatened the outlets with closure. The company had breached a ban on overseas retailers owning more than 65 percent of a hypermarket or suburban store.
Wal-Mart, which has 22 stores in China, hasn't started building its first Beijing store after a year of trying to get the go-ahead from authorities.
The setbacks leave more room for local competitors such as Wu Mart Group Co and Lianhua Supermarket Co, China's biggest grocery chain, to expand. Lianhua plans to increase its stores to 6,000 from 1,700 by 2005, including 1,000 in the Beijing area, company spokesman Sun Ming said.
"The Chinese government wants to encourage the development of strong domestic retail companies," said Huang Guoxing, a professor at People's University in Beijing who tracks China's retail industry.
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