VZCZCXRO3316
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #4645/01 3581014
ZNR UUUUU ZZH
P 231014Z DEC 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 1560
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC

UNCLAS SECTION 01 OF 02 BEIJING 004645 
 
DEPT OF STATE PASS TO USTR STRATFORD AND MAIN 
DEPT OF COMMERCE PASS TO KASOFF, MELCHER, DYCUS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ECON WTRO ETRD EAIR CH
 
SUBJECT: NDRC RESPONDS TO U.S. CONCERNS ON POSTAL LAW 
 
THIS CABLE IS SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET 
DISTRIBUTION.  PLEASE HANDLE ACCORDINGLY. 
 
REF: (A) BEIJING 4293; (B) BEIJING 3509 
 
¶1. (SBU) SUMMARY:  The Embassy received on December 22 from the 
National Reform and Development Commission (NDRC) a faxed statement, 
dated December 18, responding to U.S. Government and private sector 
comments on the Revised Draft of the Postal Law.  NDRC's statement 
avers that the exclusion of foreign firms from domestic express 
delivery services is consistent with China's commitments to the 
World Trade Organization (WTO).  It also states that the draft law 
excludes all express delivery companies (both domestic and foreign) 
from those mail delivery business exclusively operated by postal 
enterprises.  As the National People's Congress' (NPC) second and 
possibly third reading of the Postal Law, originally anticipated for 
the NPC Standing Committee December 22-29 session, has been 
postponed, Mission China will continue, in consult with industry, to 
convey to policy makers at the national and regional level U.S. 
concerns with the draft law and urge its revision.  END SUMMARY. 
 
¶2. (SBU) The attached text is an Embassy corrected version of NDRC's 
courtesy translation, which more accurately reflects the original 
Chinese text. 
 
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BEGINNING OF TEXT 
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The National Development and Reform Commission of the People's 
Republic of China 
 
Dec. 18, 2008 
 
Written Statement on the Postal Law (Revised Draft) of the People's 
Republic of China 
 
The Postal Law (Revised Draft) of the People's Republic of China was 
submitted to the Standing Committee of the National People's 
Congress for review on Oct. 23, 2008, and then the Sub-Committee on 
Legislative Affairs of the Standing Committee of the National 
People's Congress invited comments on the Revised Draft from the 
general public from Oct. 30 to Nov. 30, 2008.  Relevant departments 
of the federal government of the United States of America, the 
U.S.-China Business Council and some American companies have paid 
close attention to the Revised Draft of the Postal Law, and provided 
comments on certain contents of the Revised Draft through the Fifth 
U.S.-China Strategic Economic Dialogue (SED) and other channels, 
particularly on Article 50 of the Revised Draft, which states 
"Foreign companies are restricted from investing or operating in the 
domestic mail (see definition below) express delivery service."  The 
National Development and Reform Commission of the People's Republic 
of China, according to its knowledge, would like to provide 
information as follows: 
 
The Revised Draft of the Postal Law was drafted in line with the 
Reform Plan on the Postal System, by widely soliciting opinions from 
domestic government agencies, enterprises, experts and customers, 
and borrowing ideas from useful experiences and practices of other 
countries.  The Revised Draft imposes no discrimination on foreign 
companies, and will not affect the existing international delivery 
business of foreign companies operating in China for reasons as 
follows: 
 
¶I. Article 50 of the Revised Draft states "Foreign companies are 
restricted from investing or operating in the domestic mail express 
delivery business.  The domestic express delivery business herein 
refers to a business in which the entire delivering process from the 
acceptance of the mail piece to the delivery to the recipient occurs 
within the borders of China." 
 
This article does not violate China's commitment to the WTO, neither 
will it affect activities such as acceptance, posting, transport, 
delivery and etc., carried out by foreign express delivery companies 
in China when they operate international mail express delivery 
business (except for private mail). 
 
II. Article 54 of the Revised Draft states "Express delivery 
companies are excluded from those mail delivery businesses 
exclusively operated by postal enterprises, and express delivery 
companies are also restricted from posting and delivering official 
documents of government agencies." 
 
According to this article, the mail posting and delivery business is 
the exclusive business of postal enterprises, and express delivery 
 
BEIJING 00004645  002 OF 002 
 
 
companies are restricted from delivering official documents of 
government agencies.  This is applicable to both domestic and 
foreign express delivery companies.  In this regard, the Revised 
Draft treats domestic and foreign express delivery companies 
equally, and imposes no discrimination against foreign enterprises. 
 
The Chinese government holds an open and welcoming attitude towards 
foreign companies carrying out express delivery business in China, 
and has provided foreign companies with equal and fair treatment in 
line with China's commitment to the WTO and relevant laws and 
regulations.  The Chinese government also has provided foreign 
express delivery companies with maximum policy support.  Under such 
policy environment, foreign express delivery companies have seen 
fast expansion in the Chinese market in recent years along with 
China's steady and fast economic growth, and have dominated over 80 
percent of the market share of China's international express 
delivery business.  One outstanding example showing China's support 
to foreign express delivery companies is the recently built 
transportation hub at the Guangzhou Baiyun International Airport, 
which is the largest of its kind in the Asia-Pacific region, with 
total investment of 2 billion RMB by the Chinese side, and will be 
rented to Fedex Corp. to start operation shortly. 
 
mail: refers to letters and postcards 
 
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END OF TEXT 
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¶3. (SBU) Copies of the original NDRC statement in Chinese and 
English are available via fax or as a scanned document from Daniel 
Kachur (kachurd@state.gov) of the Embassy's Economic Section.  The 
statement was apparently simultaneously transmitted to industry via 
the U.S.-China Business Council.  Local United Parcel Service (UPS) 
contacts do not view the NDRC letter as adding anything constructive 
to the dialogue underway.  The contents of NDRC's statement are 
essentially the same as NDRC Vice Chairman Zhang Xiaoqiang's 
delivered remarks at the U.S.-China Strategic Economic Dialogue 
(SED) meeting in Beijing on December 4-5. 
 
¶4. (SBU) The National People's Congress' (NPC) second and possibly 
third and final reading of the Postal Law, originally anticipated 
for the NPC Standing Committee December 22-29 session, has been 
postponed.  The reason for the delay was not made public, but NPC 
Economic Committee members told Economic Minister Counselor Robert 
Luke that they were aware of strenuous objections by U.S. and 
European industry representatives, and they hoped this delay would 
give time to address some of those concerns.  Embassy Economic 
Section, Foreign Commercial Service (FCS), and USTR offices will 
continue to work closely with affected U.S. companies in China to 
engage and educate local and central government officials of U.S. 
concerns with the draft law and urge revision of the draft law prior 
to passage. 
 
RANDT