Law Drafting Goes Postal

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Another day, another draft law. This time it is for the (eighth draft of the) Postal Law (via FT) and, as usual, there is plenty of feedback in the market suggesting that it would create:

    “unfair competition violate trade agreements and destroy non-state businesses employing hundreds of thousands of people”.

It is reported that the law would give China Post a “total monopoly over deliveries of parcels weighing less than 150g, which account for more than 90 per cent of the intra-city business of private delivery companies”. In addition, it is thought that it would prevent foreign and private firms from handling business from online retailers. Other measures are also thought to benefit China Post, with tightening of “licensing controls and compulsory payments to subsidise universal postal services”.

So, what is the postal service in China all about? Here are some (not insignificant) official statistics on deliveries from 2005:

    • 95.32 Million Parcels
    • 230 Million Express Mail Items (Up 15%)
    • 1 Billion Periodicals
    • 7.35 Billion Letters
    • 15.03 Billion Newspapers

No wonder the international firms want a piece of it! The Conference of Asia Pacific Express Carriers (Capec), which represents international delivery companies (such as DHL, UPS, FedEx and TNT – who perhaps want to keep a lower individual profile when complaining) is quoted as saying that:

    “China is drafting a new, misguided postal law without consulting industry and without considering the broader economic implications of a restrictive postal regime”.

The FT reports that the draft is part of a plan to restructure the postal system, and to separate its overlapping regulatory and operational functions. This seems to be in line with general policy moves, and the introduction of the Anti-Monopoly Law. However, it seems that any plans for aggressive reform may have been…lost in the post (for now).

See news source:

    China’s draft postal law angers private firms
    Local and foreign express delivery companies have denounced the latest draft of China’s Postal Law, saying it would create unfair competition, violate trade agreements and destroy non-state businesses.
    FT (subscription)

2 Responses to “Law Drafting Goes Postal”

  1. Archive » Protecting People’s Assets| China Business Blog Says:

    […] aw, News, Economy Legislators have been busy in China in recent months (with postal, monopoly and other laws) but, for the first time, they are on a sixth draft of a law (wh […]

  2. » Blog Archive » Jeremy Gordon on the Draft Postal Law Says:

    […] about postal regulations here – never came up so far. So I defer in this instance to this informative post (and the FT article). This is shaping up to be another protectionism story. We […]

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