Leading express operators and trade organisations have criticised a new Chinese postal lawexcluding private foreign companies from delivering domestic letters within the country.
Under the new law, passed on April 24 and which will enter force on October 1, only ChinaPost will be allowed to deliver domestic letters and documents in future. Foreign companies willonly be allowed to deliver international mail as well as packages within China. Although this doesnot change the existing legal situation, private express operators and trade organisations hadlobbied the Chinese government to liberalise the domestic mail market and enable competition tostate-owned China Post.
The new postal law contains a broad definition of “letters and documents” to include almostall printed material and also data on CDs and DVDs. “Letters” include commercial documents such asproposals and bids, contracts, formulae, and engineering plans that senders consider too sensitiveor urgent to be transmitted by other methods, the Global Express Association (GEA) said. “Byplacing transport of such documents off limits to foreign-owned express delivery companies the newpostal law denies them an important source of revenue and threatens their viability in the widerexpress delivery services market. It also curtails incentives to maintain or improvecustomer-focused services in the limited area left open to competition,” it declared.
The European Chamber of Commerce in China stated that the “protectionism” within the lawwould limit the development of the country’s logistics industry and questioned how it matchedChina’s commitments to free trade as a world trade express delivery industry where Chineseconsumers could enjoy more choices and where the overall service quality can this law, however,will limit the development of the country’s logistics industry and will result in fewer options andlower quality services for customers.”
Furthermore, the new Postal Law creates a new licensing system for express delivery services,which is a step backwards from the efficient de-regulation established in China’s 2004Administrative Licensing Law, the European Chamber pointed out. “Collectively, these measures willerode the competitiveness of foreign invested firms against their domestic counterparts in thewider express market. This combination will reduce market incentives to maintain or improvecustomer-focused service,” it warned.
The Conference of Asia Pacific Express Carriers (CAPEC), representing DHL Express, FedExExpress, TNT and UPS, said it regretted that the recently enacted China Postal Law excludes “foreign business” from entering a segment of the domestic market.
“The exclusion provision in the law does not allow Chinese companies and consumers fullaccess to foreign express delivery services providers. It will erode the competitiveness of foreigninvested firms against their domestic counterparts in the wider express deliveryservices market and eliminate market incentives to maintain or improve customer-focusedservices. As a result, there will be fewer options and lower quality services for customers,” CAPECsaid in a statement. Express delivery companies are “an essential component of China’s developingmodern national infrastructure” and make important contributions to overall economic growth, itpointed out.
