Economy

Plan to double postal revenue

By Shen Jingting, Zhou Siyu and Chen Limin (China Daily)
Updated: 2011-03-08 09:48

A China Post vehicle in Shanghai. The postal sector is aiming to double revenue in the next five years, said Ma Junsheng, the director-general of State Post Bureau.?[Photo / For China Daily]

Ambitious aim to extend services to all villages across the country

BEIJING - China's postal sector is planning to double its revenues over the next five years, accounting for 0.5 percent of the nation's GDP, said Ma Junsheng, director-general of the State Post Bureau on Friday.

The bureau aims to extend postal services to all villages across the country, and will create more than 300,000 new jobs through the expansion, Ma also said.

The bureau said it will establish 6,000 post stations in towns, upgrade 20,000 rural postal outlets, set up 200,000 village post offices and install 70 million mail boxes nationwide during the five-year period.

"We will also help foster a number of large-scale companies, each with annual revenues more than 10 billion yuan ($1.52 billion)," Ma told China Daily on the sidelines of the fourth session of the 11th Chinese People's Political Consultative Conference National Committee.

In 2010, China's postal industry saw its revenues jump by 16.6 percent year-on-year to 127.7 billion yuan, the State Post Bureau data showed. That accounted for about 0.3 percent of China's GDP last year.

Revenues earned by the nation's express delivery business grew by 20 percent year-on-year to 57.5 billion yuan, according to the bureau.

Meanwhile, the volume of China's daily express mail, which exceeded 10 million units, became the third-largest in the world, after the United States and Japan, official figures showed.

"The odds are great for some domestic express-delivery companies to develop into world-class enterprises during this period," Ma said.

Affected by the global financial crisis, the postal industry across the world experienced a downward trend in 2008 and for most of 2009.

According to research released by the Universal Postal Union (UPU) in November, global domestic mail volumes declined by 12 percent year-on-year, to about 13 billion units, in the second quarter of 2009.

In the US, revenues for domestic airfreight and express delivery declined by 3 percent year-on-year to $31.9 billion during the first half of 2008, according to a report released in November 2009 by the Seattle-based Air Cargo Management Group, a major provider of aviation consulting and airfreight market research services.

The UPU report also said that global trade gradually rebounded by the end of 2009.

Yet, as the economic recovery is still fragile, economists predicted that global economic growth will stay at about 4 percent in 2011, meaning that the industries' future is still unclear.

In China, however, companies remained optimistic about the prospect of the sector at large, both because of the world's second-largest economy's robust growth and the country's fast-developing e-commerce industry.

Larry Rosen, chief financial officer of Deutsche Post DHL, a leading global provider of logistics services, said the dynamic nature of the China's economy means the country is still expected to outperform other major markets.

"The (Chinese) market is growing so much every year. In our home market and other major industrialized markets such as the United States, we see single-digit growth, whereas we see twice as much growth in China and other parts of Asia," Rosen said during an interview with China Daily.

Related readings:  Postal services to cover all villages by 2015  China logistics value up 15% for 2010

In 2009, the revenue earned by China's postal sector rose by 14 percent year-on-year to 109.5 billion yuan, official figures showed.

Lai Songmei, chairman of ZTO Express Service Co Ltd, one of the major express delivery companies in the private sector , said the bureau's goal is "quite within reach".

"Given China's booming express-delivery industry, to double the revenues in five years is achievable," Lai said.

ZTO Express now has 36,000 employees across the country, with its annual revenue standing at 4 billion to 5 billion yuan.

According to Lai, express-delivery companies have lagged far behind the development of the market.

Pressed by the booming e-commerce, express delivery companies in China suffer from shortage of workers, especially during long holidays when the staff usually quit their jobs to go back home, and the number of parcels surges. "Players should make an effort to improve operations, employee training, and information management to keep up with the market," he said.

Lai also said the company will invest 100 million yuan to set up two distribution centers, and at the same time, use another 40 million yuan to equip its 23,000 delivery employees with hand-held electronic machines to improve efficiency.