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LCQ6: Hong Kong courier enterprises operating on the Mainland
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     Following is a question by the Hon Wong Ting-kwong and a written reply by the Secretary for Commerce and Economic Development, Mrs Rita Lau, in the Legislative Council today (February 24):

Question:

     Recently, some members of the courier service industry have relayed to me that the new Postal Law of the Mainland stipulates that from October 1, 2009 onwards, foreign companies are prohibited from investing in courier service business involving delivery of letters on the Mainland. As Hong Kong courier companies operating the business concerned on the Mainland are regarded as foreign companies, their business on the Mainland has suffered a heavy blow, and quite a number of companies are under the threat of closure. Such members have indicated that quite a number of Hong Kong enterprises operating on the Mainland often use the courier service provided by such companies to facilitate their "front shop and back plant" mode of operation in the two places, and closure of the courier business concerned will have enormous economic impact. Such members have also indicated that they hope the Hong Kong SAR Government could expeditiously discuss with the Mainland under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) the inclusion of courier service in the scope of CEPA. In this connection, will the Government inform this Council:

(a) whether the authorities will follow up the aforesaid situation; and

(b) given that under CEPA at present, meetings of the Joint Steering Committee are held annually between the Mainland and the Hong Kong SAR Government to discuss the implementation of various liberalisation measures under CEPA, whether the authorities will consider taking the initiative to propose including courier service in the scope of CEPA, with a view to allowing service providers from Hong Kong to operate the related business on preferential terms on the Mainland; if they will, of the details; if not, the reasons for that?

Reply:

President,

(a)&(b)  The Standing Committee of the National People's Congress passed the Postal Law of the People's Republic of China (the new Postal Law) on April 24, 2009, and announced that it would come into effect from October 1, 2009. The new Postal Law prohibits foreign companies (including Hong Kong enterprises) from investing in and operating express delivery service for letters within the Mainland (i.e. the entire process of the express service from collection of the letters to delivery takes place within the Mainland). Hong Kong courier enterprises can, however, still operate express delivery service for letters between the Mainland and Hong Kong; express delivery service for parcels within the Mainland and cross-border express delivery service for parcels in accordance with the law.

     The State Post Bureau subsequently published a notice on September 30, 2009, which stipulates that enterprises not meeting the statutory requirements for operating express delivery service for letters would have to meet the relevant requirements for their business, and obtain a permit to operate such service before September 30, 2010. In other words, enterprises which are now operating express delivery service for letters but yet to meet the conditions under the new Postal Law may continue to operate temporarily during the grace period until September 30, 2010.

     The Government of Hong Kong Special Administrative Region (the Government) has all along been closely monitoring the launch of the Postal Law and its impact on the local trade. Since mid-2009, the Government has been in contact with the trade and has been actively liaising with the relevant Mainland authorities to gain a better understanding of the implementation of the new Postal Law, and to reflect concerns on the impact on Hong Kong enterprises. The Government will continue to keep in touch with the Hong Kong courier industry. Apart from directly reflecting the industry's concerns and requests to the Mainland authorities, the Government has proposed to include the service concerned under CEPA so as to enable Hong Kong service providers to operate express delivery service for letters which is outside the monopoly of the China Post Group. The Government will continue to discuss with the Mainland authorities with a view to reaching a settlement.

Ends/Wednesday, February 24, 2010
Issued at HKT 16:37

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