The long-awaited reform of China's postal service is gathering momentum with the launch of 10 new management bureaux this week.

Yesterday the State Postal Bureau (SPB), or China Post, launched five provincial post management bureaux in Shanghai, Hebei, Fujian, Ningxia and Chongqing, according to an SPB spokeswoman. That followed the opening of five bureaus in Tianjin, Zhejiang, Shandong, Sichuan and Shaanxi on Monday.

The new bureaux are part of the government's ambitious market-oriented reform scheme through which the SPB's administrative functions and business practices will be separated. The SPB plays a dual role in China as it's both the national postal operator and the country's postal regulator.

The SPB spokeswoman said provincial bureaux would be established across the country in the near future but didn't give a specific timetable. Provincial management bureaux will be under the direct administration of the SPB rather than the jurisdiction of local government.

Also planned is a national administration centre and the China Post Group Corp which will deal with postal services. The two will operate independently.

The State Council last year endorsed the much-debated postal reform package. The scheme was proposed several years ago but its complexity stalled the process. And questions have been raised as to how the government should deal with combining so-called post-exclusive services and competitive postal services after the reforms.

While competitive postal services such as express delivery have proved lucrative and enjoyed rapid growth post-exclusive services such as sending letters and the printing of stamps have suffered losses.

The government currently subsidizes post-exclusive services. But determining how to foster the unprofitable industry after the reforms may prove difficult.

A fully market-oriented postal operator may not be willing to offer post-exclusive services without government subsidies. For example it's understood that establishing a presence in poverty-stricken or mountainous regions is unprofitable for operators.

Delivery giants DHL, FedEx, TNT, UPS and domestic private logistics firms have long lobbied legislators and regulators for industry deregulation and a specific definition of post-exclusive services.

Chinese legislators are amending the existing Postal Law to redefine the scope of post-exclusive services but the SPB spokeswoman said a timetable for this hadn't been set.

(China Daily September 6, 2006)