China postal law revision seen eroding competition: report


July 15, 2010 Updated Apr 25, 2009 at 1:01 PM CDT

China's parliament has revised the nation's postal law in a move that will ban foreign delivery companies from handling domestic express mail, state press reported Saturday.

The revised law was passed by the National's People's Congress on Friday despite opposition from express delivery giants including DHL, FedEx, TNT and UPS, the China Daily reported.

The newly amended law that goes into effect on October 1 bans foreign companies from delivering express letters within China, the newspaper said.

But foreign delivery companies with operations in China will be permitted to deliver express packages domestically, as well as express letters internationally, it said.

Legislators insisted the new law complied with China's World Trade Organisation commitments, it said.

The Conference of Asia Pacific Express Carriers, which represents the four global giants and lobbied against the amendment, called for an "open and level playing field" in the sector.

The provision would "erode the competitiveness of foreign invested firms against their domestic counterparts in the wider express market," the China Daily quoted a CAPEC statement as saying.

"CAPEC regrets that the newly enacted China Postal Law excludes foreign business from entering a segment of the domestic market," it added.

Express delivery is big business in China, accounting for about 43 percent of 96 billion yuan (14 billion dollars) in revenue in the nation's postal system last year, the report said.

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