Private companies shouldn't fund public postal service

Updated: 2013-05-09 21:08


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Using some of private express companies' profits for a fund for China's postal service has become a controversial idea in recent days. The State Post Bureau has responded that the money would subsidize up to 600,000 village post offices nationwide, not China Post. However, such an act would in fact have the obvious effect of interfering with the free market, says an article in Southern Metropolis Daily. Excerpts:

Universal postal service, especially in remote areas, is a public service a government provides to guarantee its citizens' basic right to communicate. The huge cost to offer such service is supposed to receive special support funds from the government. At present, it is a question of who will pay for the fund.

Private express companies should by no means shoulder the obligation to subsidize universal postal service after paying their due tax, even though they have become in recent years competitors of the traditional postal service and taken some of its market share because of the private companies' relatively higher efficiency and lower charges.

The emergence of e-commerce has offered an unparalleled opportunity for express companies, but generally speaking, the majority of private express companies are struggling to survive amid vicious competition. The extra burden caused by possible financial contributions to the fund for universal postal service would not only be adverse to industry development, but also curb consumers' passion for online shopping as well as domestic consumption.

Experience from developed countries shows that a universal postal service is clearly positioned as government's social responsibility, and government should provide this service with financial support. Any attempts to impose the operation cost of the public postal service on all companies in the industry would weaken market dynamics and run counter to the proposal for fair competition.