China Extends Parcel Restriction Deadline
China’s postal monopoly has extended its deadline for express delivery companies to comply with new restrictions on their businesses, in the first sign it may be softening its stance in a regulatory dispute with its competitors. China Post had issued regulations requiring all express delivery companies to stop handling letters and packages under 500 grams, and register with it to continue their other businesses. A notice in Monday’s People’s Daily extended the original May 6 deadline to June 15. The move comes after U.S. Secretary of Commerce Donald Evans visited China last week and pressed his hosts to continue to allow free competition in the express delivery market. Other U.S. and European Union officials have also been lobbying the government on the issue. China Post’s ruling is widely seen as an attempt to shield its own express delivery business, EMS, from competition by the likes of FedEx Corp. (FDX), United Parcel Service Inc. (UPS), DHL Corp. (X.DHL) and TPG N.V. (TP), not to mention many domestic companies. The international express delivery companies have been operating in China for years through joint ventures licensed by the Ministry of Foreign Trade and Economic Cooperation. But the current limits on their business are to be gradually lifted now that China has entered the World Trade Organization, prompting China Post to use its regulatory muscle to protect its core letter delivery business. The China International Freight Forwarders Association, which is representing domestic and international express delivery companies in the dispute with China Post, didn’t have any immediate comment on the notice.
