China Raised Its Domestic Postage Rate Again
Jim Q. Fang

According to World Journal (96.12.1), the largest Chinese newspaper outside mainland China, China raised its domestic postage rate from 20 to 50 cents for non-local letter and from 10 to 50 cents for local letter in Chinese currency in the last December 1st. It is only the second time of domestic postage rate adjustment in nearly half century in China. The first one occurred in 1990 when the government allowed the Ministry of Post and Telecommunications (MPT) to increase domestic postage rate from 8 to 20 cents for non-local letter and from 4 to 10 cents for local letter in Chinese currency.
Soon after 1949 when the communists took the power of mainland China, 800 yuan was chosen as the unified rate for non-local domestic letter. This rate was even lower than previous rates in some provinces and areas. For example, Yunnan province had its own rate of 1000 yuan before using the unified rate in May 11th of 1950. New currency units were put into practical in March 1st of 1955 and the 800-yuan domestic rate was changed to its equivalent of 8 cents in the new currency system. From that time until 1990, the rate remained no change.
Even after the adjustment of this time, China’s domestic postage rate is still quite low compared with its international postage rate, its home price index, or with USA’s domestic postage rate. In early 1950s, 8 cents of Chinese currency were worthy of about 5 cents of USA currency and could buy about half pound of millet on Chinese market. In 1990, the then new domestic postage rate, 20 cents, however, were only worthy of about 4 cents of USA currency and could only buy about two oz of millet. This time, 50 cents are equal to about 6 cents of USA currency according to the current exchange rate.
Low domestic postage rate has caused a long-term trouble to both the Chinese central government and MPT. According to Mr. Sheng Minghuan, Director General of Posts, today a domestic letter in China is transported 770 km on average and costs 86 cents in Chinese currency. As a result, the Postal Service suffered a loss of 66 cents on average for each domestic letter it sent before the adjustment. From 1991 to 1995, each year the capital loss from postal service was 0.38, 1.03, 2.42, 3.37, and 5 billions of Chinese yuan, respectively. This year, the lose may reach 7 billion yuan, about 0.85 billions of US dollars, according to Central Daily News (96.11.29), another Chinese newspaper published in Taiwan.
Before China’s economic reform in early 1980s, prices of almost everything on Chinese market, including its postage rate, remained no change for decades and the communist government enjoyed its ever-stable prices. Since the reform, the most important obstacle for China’s domestic postage rate adjustment came from pressure of inflation control. According to Mr. Sheng, the General of Posts has proposed to raise domestic postage rate for several times in the past years, and every time it was turned down by the central government under consideration of inflation control. The government worried that domestic postage rate increase would cause an increase of price index and bring a higher inflation pressure. In 1996, inflation seems to be under control and so the central government finally allowed MPT to increase domestic postage rate. According to Central Daily News, however, the basic rate that the General of Posts expected to raise to is one yuan (dollar) rather than 50 cents as it is now.
This worry was also confirmed by China’s international postage rate adjustment. The government felt no hesitation to postage adjustment for international mails because it had a very limited impact on domestic inflation. Since 1988, MPT has raised its international postage rate for more than four times from 1.1 yuan (dollar) to 2.90 yuan which is 14.5 times higher than then 20-cent domestic rate. This time, the international postage rate was adjusted again. Although MPT claimed that it did not raise the international postage rate this time, it lift the bottom of weight calculation for an international letter from 10 to 20 grams. Consequently, the minimum postage was changed from 2.90 to 4.20 yuan. Moreover, a 2.20 air mail fee is added to each air mail. So, the minimum postage for an international air mail is actually raised from 2.90 to 6.40 yuan after the last December 1st, which is equal to about 77 cents of US currency and again is nearly 13 times higher than the new 50-cent domestic rate.
Looking from a good side, the unusual low domestic postage rate brought some fun to stamp collectors. One thing is that many postmen ignored how much postage was affixed or even ignored what stamps were used as postage because the required postage was too low and almost worth nothing. Last November, one of my friends in China sent me three covers, which were recently used for domestic letters in China. One of them is with a USA stamp on it as postage, one with a stamp of Republic of China as shown in Fig. 1a, and another with two stamps of Manchukuo, a dead Japanese puppet nation established in Northeastern China during the World War II.
Because the government of Republic of China (ROC) in Taiwan and the government of People’s Republic of China (PRC) in mainland are still hostile to each other, it is illegal to trade ROC’s stamps on any market of mainland China. According to Central Daily News (96.10.18), the PRC government re-enforced its ban to ROC’s stamp trade in October of 1989 and again in October of 1996 through official orders jointly issued by the Ministry of Public Security, the MPT, and National Industrial and Commercial Bank. However, there seems to be nothing to worry to use ROC’s stamps on a domestic letter of mainland China because the required postage was so low that no one paid serious attention to what kind of stamps were used.
The letter shown in Fig. 1 was sent from Santou to Sanwei, two cities in Guangdong (Canton) province of mainland China, and was returned from Sanwei due to incorrect address. So there was a form for letter return (Form 1407) was affixed on the face side of the cover by the post office at Sanwei, which is shown in Fig. 1b. There were two postmarks of receiving places on the back of the cover, which is shown in Fig. 1c. Plus to the postmarks on the stamp and on the Form 1407, it becomes clear that the letter was sent on Sept. 4 1996 from Santou, received at Sanwei on Sept. 6, returned on Sept. 8, and received at Santou on Sept. 11. After doing so much work to the letter, the postmen did not say any word about the ROC stamp, which was affixed on the cover as postage.

1997. Jan. Originally published on Lynn Stamp News