China Postal agency moves into logistics
China’s national postal service is getting into the logistics business. The newly-formed China Postal Logistics Co Ltd. will build a nationwide delivery network in the next three to five years, State Postal Bureau deputy director Ma Junsheng said. “The establishment of the new company is part of our strategy to further tap the lucrative logistics market,” he said.
The move comes as foreign competitors such as United Parcel Service, FedEx Corp., TNT and DHL Worldwide expand their reach in Asia.
Ma said he expects logistics services to generate sales of 3 billion yuan ($360 million) this year, and $1.2 billion by the end of 2005.
China promised to open service industries, including the delivery business, to foreign companies three years after its entry into the World Trade Organization in late 2001.
As reported, air express operators in China are now free to take control of joint ventures up to a maximum 75 percent, against the previous 49 percent limit.
New regulations from the Ministry of Foreign Trade and Economic Cooperation say that overseas cargo companies can establish new ventures with at least $1 million in capital. Carriers can also buy shares from other international cargo companies operating in China.
China has promised to allow foreign courier companies to establish wholly-owned operations in China, but hasn’t said when. WTO commitments say that must happen before the end of 2005.
China currently forbids foreign express operators to handle shipments of less than 50 grams (1.1 pounds), citing a monopoly clause in the charter of the State Postal Bureau, which runs China Post.
“Even the rules of the World Trade Organization do not promise the opening of the letter delivery business to overseas operators,” a China Post spokesman said.
China Post contends that express delivery companies try to blur the distinction between postal services and goods delivery services.
