China’s Postal Services: Which Path Forward?

Click here to download the full study as PDF.

Studies on the Changing Postal Marketplace: Volume 1

Executive Summary

This report represents the first in a series examining the postal and delivery sectors of the world’s major economies. It focuses on China’s postal services, market dynamics and the extent to which the needs of household and business consumers are being met. China was selected as the first post to review due to its significant market presence and growing influence, with China Post revenue exceeding 97 billion yuan (US $15 billion), and delivering nearly 2.4 billion pieces during the first half of 2012.

While China Post has realized significant growth in both postal and non-postal revenue, it has largely ignored trends that have characterized the reform strategies of other national posts. For example:

• Service standards such as those published by postal operators in most industrialized countries do not exist for China Post, whose annual report instead publishes numbers of complaints received and the results of customer surveys on satisfaction and perceptions of improvement.

• Regulation by an independent regulatory authority, with delineated separation between operational and regulatory responsibilities.

• Draft regulations introduced in 2013 would impose new fees on private delivery operators, with no evident link to the proceeds contributing to either improvements in service quality or increased liberalization to expand consumer options.

• Deregulation of the postal monopoly.

Laws that create and protect postal monopolies have tended to result in decreased delivery performance and increased costs, to the detriment of the consumer. In addition, protectionist laws tend to reduce posts’ competitiveness, potentially shortening their longevity. To avoid such an outcome, posts worldwide have opened their markets to outside competition and de-regulated the postal monopoly, generally resulting in more competitive and financially viable posts.

China Post decisionmakers seeking to consider policies that support economic growth and benefit consumers face a wide range of choices. Among these options, increasing transparency, adopting universal service quality metrics, pursuing liberalization and adopting innovations with demonstrated success in other postal systems could prove to be of the greatest benefits to consumers.