Concerns over Chinese postal law
China should improve transparency of a new law governing the country’s USD 6 billion-a-year express delivery market, say executives at UPS. An updated version of China’s Postal Law, which was promulgated in 1986, is in its ninth version and has been a source of concern for foreign and domestic courier companies pitted againstChina Post, the incumbent.
Ken Torok, UPS Asia Pacific president, noted that transparency surrounding the law’s most recent drafts had deteriorated. There are concerns China could introduce a“universal tax” of 4 percent on overseasentrants.
Torok contrasted the opacity of China’s new postal law with a more open process in India, which is also revising its antiquated regulatory regime and posts drafts on the internet.“When they do that everyone has visibility,”Torok said. “We’d like to seemore of that in China.”
Uncertainty also surrounds how China intends to “carve out the monopoly”. According to an earlier draft of the law, only China Post’s express delivery arm would be allowed to deliver parcels weighing less than 150g– a restriction of particular concernto the incumbent’s domestic competitors.Last October, an increasingly vocaldomestic lobby of state-owned and privatecourier companies that competeagainst China Post took issue with theproposed limit.
Booz Allen Hamilton, a consultancy, estimates China’s express delivery market will reach USD 5.8 billion this year and USD 7.4 billion in 2008.
