Chinese Post service uses circular in bid to beat off competition

China’s State Postal Bureau, under rising pressure in the marketplace, is trying to use its role as regulator to make life harder for its competitors, state media said Friday.

The bureau, also known as China Post, has given express delivery companies a tough choice in an attempt to save its own courier service, Express Mail Service, the China Daily reported.

Either rival express delivery companies should only deliver goods weighing more than 500 grams, or they should charge more than China Post does, the paper quoted China Post as saying.

The announcement has triggered an angry response from express delivery companies, saying China Post is “protecting a monopoly” and “will hurt the whole economy,” the paper reported.

If China Post’s tighter rules are allowed to be implemented, it could mean the end of many of China’s new courier services, the paper said.

The China International Freight Forwarders Association said that many of its 539 member companies would die if they were to follow the new regulations, the paper said.

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As far as the five giants (including UPS) operating international EMS (express mail service) businesses in China are concerned, May 6 may be an unforgettable day.

The China Post Bureau has issued a circular demanding the five to undergo entrustment management procedures in Post Department before May 6. Otherwise, they can’t operate businesses in China. However, the five will not surrender. If they do as the Bureau require, they will have to give up half of their businesses to China’s EMS companies.

Recently, Li Limou, the Secretary General with the China International Freigt Forwarders Association, held the International Freight Forwarders Seminar. At the Seminar, the China Post was condemned.

On February 4, the China Post issued the No.64 Circular which sets up some restrictions for international EMS companies: cross-border EMS can’t provide under-500-gram international EMS in China, etc.

While in the past two decades, cross-border EMS enterprises have been relying on the under-500-gram to make profit.

“If we register, we will lose half of our businesses.” A manager said angrily at the Seminar.