China’s new postal law confirms China Post’s monopoly on express documents and small packages. This has been, in theory, the situation for some years but many foreign firms have been working around them.
The problem when the new law was introduced to uphold the monopoly, it removed one of the most profitable segments of the market.
Key to the changes are a few broad definitions:
Express is defined as delivery activity quickly completed within committed time frame.
Delivery is defined as the activity to send the letter and postcard, parcel, printing matters and other items to certain individual or company upon the address attached, via sending and receiving, sorting, transportation and delivery, etc.
Letter is defined as information carrier to a particular individual or unit sealed in an envelop according to the specific address excluding book, newspaper and magazine, etc.
Parcel is defined as the weight less than 50kg, each Length, Width and Height is less than 150cm. Further, L+W+H <= 300cm.
The killer lines in the new law are:
Foreign invested companies are not allowed to deliver domestic Letter and Postcard.
Express companies are not allowed to deliver Monopolized Letters and Postcards and government documents.
The first rule is aimed at foreign firms.
The second rule is really geared towards the local firms known as kauidi (express companies).
For local firms, it is possible to get certified:
Registered capital: delivery within one province or municipality – RMB 500,000;
Across province or municipality delivery – RMB 1,000,000;
International express – RMB 2,00,000
All of which, in the end, will go a long way to increasing Beijing’s dreams of improving the quality of its logistics industry although it also means that the smaller players will go to the wall.
All Roads lead to China explains that for those firms looking for a loophole, or think they will just slide by, there are consequences to breaking the law:
Running express business without license: confiscate all illegal income and RMB 50,000-100,000 penalty. If serious, RMB 100,000-200,000 penalty.
If no inspection policy or no execution of inspection: punishment on responsible person, stop the business or even suspend the express license.