April 26,2009

China's Restriction on Foreign Express Delivery Service in Postal Law Labeled Protectionism

By CSC staff, Shanghai
As China’s new Postal Law is introduced, it is abruptly criticized as "Protectionism" by the European Union Chamer of Commerce in China.
The revised Postal Law forbids foreign companies from delivering express mail in China. The business accounts for a big chunk of income of China’s state-owned postal system. In the first quarter, of the 26 billion yuan income, 10 billion yuan is from express mail delivery. 
The Standing Committee of China’s National People's Congress (NPC) adopted China’s new Postal Law on April 24th  morning, and it will turn effective on October 1st. The European Chamber responded 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 "is 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 Legislative Affairs Office of the Standing Committee of NPC 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 that it creates 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. And 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.


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