China's giant express mail company, Express Mail Service (EMS), faces increasing threat from its overseas counterparts since a newly signed China-US agreement has facilitated their entry into China's market.

According to Beijing-based China Youth Daily, an agreement on aviation was jointly signed by US Transportation Secretary Norman Y. Mineta and director of the General Administration of Civil Aviation of China Yang Yuanyuan on July 24.

The agreement said that the number of flights shuttling between the two countries will soar to 249 a week from the existing 54 within six years, among which 111 will be freight carriers, and transnational companies in freight distribution from the United States are allowed to set up freight forwarders in China.

Federal Express (FedEx) and the United Parcel Service (UPS), leading companies in global express distribution, logistics and mail, had already filed applications for opening new flights approved by the agreement before its official signing.

Statistics from China's Customs show China's EMS, as a part of China Post, took up 33 percent of China's international express mail market in 2001, but dropped to 29 percent in 2002, while other enterprises in the field claimed 67 percent of market share in 2001, which rose to 71 percent in 2002.

Under a WTO commitment, China will grant unrestricted market access to foreign enterprises in express service by 2005. The annual production volume of this market is expected to hit 5 billion yuan (600 million US dollars) in China, which is a big business global enterprises would vie for, said experts.

China will rank the fastest growing region in global freight industry in the next 20 years, with an estimated annual growth rate of nearly 15 percent, noted experts.

(Xinhua News Agency July 28, 2004)