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2009-04-27 | All chapters

China’s Foreign Express Delivery Restriction Decried As Protectionism
China Stakes, 27th April 2009

As China’s new Postal Law is introduced, the European Union Chamber of Commerce in China is abruptly criticizing it as “Protectionism”.

The revised Postal Law forbids foreign companies from delivering express mail in China. The express delivery business accounts for a big chunk of income of China’s state-owned postal system. Of the 26 billion yuan income in the first quarter, 10 billion yuan was from express mail delivery.   

The Standing Committee of China’s National People's Congress (NPC) adopted China’s new Postal Law on the morning of April 24th, and it will become effective on October 1st. The European Chamber of Commerce responded by saying that it is “disappointed that the new Postal Law does not allow Chinese companies and consumers full access to foreign express delivery service providers, and regrets that this may raise questions about China’s WTO commitments and contradict international best practices.”

The European Chamber went on to add that they are also concerned about “the tendency towards protectionism reflected in this law, as protectionist measures would only exacerbate the current crisis and inhibit China’s economic recovery.” 

According to the European Chamber, since the meeting with the Standing Committee’s Legislative Affairs Office in November 2008, the Chamber’s Logistics Working Group has been working proactively on lobbying for “a level playing field in China’s express delivery industry where Chinese consumers could enjoy more choices and where the overall service quality can be improved with the introduction of the latest technology and advanced management methods.”

The European Chamber interprets the new Postal Law as that it is creating a new licensing system for express delivery services, which is a step backwards from the efficient deregulation established in China’s 2004 Administrative Licensing Law. “Collectively, these measures will erode the competitiveness of foreign invested firms against their domestic counterparts in the wider express market. ”

The European Chamber appears to be angry. It says, “The protectionism in this law, however, will limit the development of the country's logistics industry and will result in fewer options and lower quality services for customers.”

As an essential part of the supply chains, the express delivery industry is increasingly important to China’s manufacturing and service firms as they move up the value chain. Ironically in the same day of the adoption of the new Postal Law, the State Council announced the plan to boost China’s logistics and distribution industry.

Source: http://www.chinastakes.com/Article.aspx?id=1166

To view the European Chamber's press release on the new Postal Law, please click here.