China’s new rules for the domestic express letter and parcel delivery came into effect on 1 October which give state-owned China Post a monopoly in specific areas. The new Postal Law gives exclusivity to China Post’s Express Mail Delivery (EMS) unit for intra-city express delivery of letters and parcels under 50 grams and inter-city delivery of items under 100 grams.

The move virtually wipes out private mail delivery companies in China – who currently have an estimated 60 per cent market share in city-to-city express parcel delivery and 80 per cent of the intra-city market.

The Chinese government has taken pains to assure foreign integrators that their international operations will not be effected by the new rules, but it effectively bars them from the domestic letter and small parcel delivery market. They have also stressed that the law conforms to China’s World Trade Organisation obligations regarding access to its markets and sets no new obstacles for foreign investment.

“The aim is to build a unified and open express market with fair and orderly competition,” said Su He, deputy chief of the China Post Bureau.

Multinational express giants have been cautious in responding to the new postal regulations, but industry analysts say the impact would be minimal as most of their business is focused on parcels heavier than 100 grams and primarily international business.