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The world's four major express delivery companies have applied for new approval certificates with the State Postal Bureau (China Post) before the set deadline despite their protests.
Eddy Chan, a spokesman for the Conference of Asia-Pacific Express Carriers said yesterday that the major express delivery companies - FedEx, UPS, DHL and TNT - have all submitted the application on November 7, one day before the deadline imposed by China Post.
FedEx, UPS, DHL and TNT are all members of the industry group.
Two months earlier, China Post said in an statement that they would oversee the country's express delivery companies for the Ministry of Foreign Trade and Economic Cooperation (MOFTEC).
Foreign companies still need MOFTEC's approval for licences but China Post will now oversee them.
The statement on September 7 also said foreign express companies had to apply for a new operating permit within 60 days.
Chan said the application does not mean the council accepts an industry regulator change despite the need for certification with China Post.
He said they followed through with the application because of certain assurances given to them by the Chinese authorities.
Related departments promised that an additional application for an "entrustment" would be a one-time only action and that the approval certificate from China Post will have the same scope, area and duration as the original MOFTEC certificate did.
"We do not anticipate that our businesses will be changed in the future," said Chan.
But Chan said the companies still object to China Post as the regulator since its commercial arm is also their competitor.
"We will work with appropriate agencies to change this in the future."
The delivery companies he represents have been regulated for more than a decade under a licensing regime supervised by MOFTEC which has worked very well, he added.
The move by China Post has been criticized as monopolistic, aimed at helping its Express Mail Service, the only domestic competitor to foreign operators.
China Post's Express Mail Service saw its international sales reached 1.07 billion yuan (US$129.3 million) last year, about 35 per cent of the international express delivery market in China.
The remaining market share was split among the four major foreign companies.
The entire express delivery market in China is valued at 5 billion yuan (US$604 million).
China Post has made tremendous efforts to make a profit since it split from the telecom sector in 1998 in an effort to break up the monopoly in the field. The separation left it with a debt burden of 18 billion yuan (US$2.2 billion).
(China Daily November 15, 2002)
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