Research On The Compensation Mechanism For Universal Service In Post Sector

It is a duty of the government to provide universal postal service, which means lasting basic postal service with high quality and regularity is available everywhere in the state, which can be afforded by every consumer. It is stipulated in China that universal postal service within the state border is guaranteed, and China Post is to provide that service according to the relevant provisions of the state, which can be regarded as the administration’s confirmation of its obligation, and assignment for China Post to undertake the specific responsibility.During the era of the planned economy, a monopoly over the post industry was exercised by the government, when China Post was compensated for its universal service by government funding and the cross subsidization from telecom service which was in the same system as the posts. Afterwards, with the function transformation and especially with the execution of the idea of “limited government, strong market”, China Post was granted independence gradually as a result of learning from the West. From September, 1998, China Post endured the throe brought by the separation of posts and telecom, the separation of posts from administration, and the separation of rival service and universal service, which caused the loss of the cross subsidization from telecom service and banking service, and the loss of the absolute aegis of the administration. It is China Post’s legal responsibility to take the role of the government to provide lasting and stable universal service continually at a low price which aims at the maximization of social benefit, while it is the posts’ operation mode to launch management and development independently, as an enterprise, which aims at the maximization of the profit. That causes a sharp contradiction, hampering both the posts’ development and its providing universal service.With that, it has an important theoretical and practical significance whether to establish a compensation mechanism for universal service and what kind of mechanism to employ. It is to help to realize the effectiveness and the efficiency of the service, which means the service can satisfy consumers’ dual demand of quality and quantity with as little as possible input of resources.A qualitative analysis in this thesis affirms that universal postal service is quasi-public goods, which is the theoretical foundation for the follow-up studies. With the reference to the research achievements on universal postal service, and the compensation mechanism for it, and the regulation of natural monopoly industry, the compensation for universal postal service in China is studied from the following three aspects:Ⅰ.Why does universal postal service need compensating? Starting from the affirmation that universal postal service is quasi-public goods, this thesis verifies the rationality of the compensating from the angel of the law and the way of supply.Ⅱ.How is universal postal service to be compensated? With the reference to the major mechanisms and the specific methods abroad to compensate universal postal service, the mechanisms are classified into two categories while the methods are classified into two types in this thesis. Then they are listed one by one, and their action principles are dissected.Ⅲ.What is the current situation of China’s compensation for universal postal service? The domestic compensation mechanism and methods and their implementation is introduced in this thesis, and their effectiveness is analyzed. Then their imperfections and problems to solve are pointed out, according to the practice of China Post’s providing universal postal service.Based on the above research, three main suggestions are put forward.Ⅰ.A competitive market of universal postal service needs establishing. Referring to the reform of Deutsche Post, China Post’s mails franchise needs eliminating gradually, while private capital is licensed to the market, which leads to the innovation of the provision of the service and ensure its effectiveness and the efficiency. Meanwhile, a supervisory regime needs organizing and improving to guarantee a healthy competition.Ⅱ.An interbank fund needs establishing. That fund focuses on compensating the opportunity cost of the universal service provider, in order to help them expand reproduction positively.Ⅲ.An income-oriented compensation mechanism needs establishing. It will be possible for an income-oriented compensating by setting a specific main body flexibly to pay for some of universal postal service, or adjusting the usual payer for that service to the main body. Thereby that service can be turned into a rival one, while its desired effect is ensured by market means.