2nd UPDATE:China Bans Foreign Invest In Local Express Mail Operating
April 24 2009 - 7:17AM
Dow Jones News
Foreign companies will continue to be barred from delivering
express letters in China's domestic market based on a new law
approved Friday, despite years of lobbying by major global
express-delivery companies to lift the restrictions.
Foreign companies will be limited to delivering express packages
domestically, and can only send express letters internationally,
Wang Yuci, vice director of the State Post Bureau, told Dow Jones
Newswires Friday on the sidelines of a press briefing.
Chinese companies, both state-owned China Post and privately
operated ones, will carry out the business of domestic express
delivery of letters, according to the revised postal law. The
European Union Chamber of Commerce in China said Friday the law
will erode foreign companies' competitiveness against their
domestic counterparts in the express-delivery market, and it
expressed its disappointment and concern over the "protectionism"
in the legislation.
It said in a statement the ban may also raise questions about
China's commitments to the World Trade Organization. "Protectionist
measures would only exacerbate the current crisis and inhibit
China's economic recovery," it said.
The chamber said the law will limit the development of China's
logistics industry and result in less choice and lower quality
service for customers.
It also criticized a new licensing system in the law for express
delivery services, calling it a step backwards from the
deregulation established in China's 2004 Administrative Licensing
Law.
The chamber said it has been lobbying Chinese lawmakers for a
level playing field in China's express delivery industry since
November last year.
Companies such as FedEx Corp.(FDX) and United Parcel Service
Inc.(UPS) have been lobbying Beijing for years as it worked on the
new law governing mail delivery, arguing the restriction prevents
them from competing in the country's rapidly expanding market for
delivering documents.
China's express delivery business had revenue of more than CNY10
billion in the first quarter, more than a third of the country's
total postal revenue of CNY25.96 billion, according to latest data
from the State Post Bureau.
The ban over foreign companies in the domestic letter express
delivery market is in line with China's commitments to the World
Trade Organization made in 2001, said He Yongjian, an official with
the Legislative Affairs Commission of the Standing Committee of the
National People's Congress.
China's revised postal law will take effect Oct. 1. It was
approved by the Standing Committee of the National People's
Congress, the country's legislature which meets once every two
months.
Under the original law, mail delivery was monopolized by China's
official postal services. There was no separate stipulation over
express delivery services.
-Liu Li contributed to this story, Dow Jones Newswires; 8610
6588 5848; li.liu@dowjones.com