18-12-2016, 06:26 AM
This works because the SARs (Special Administrative Regions) and some other select regions have free international postage for small items subsidised by the Chinese government.
There is no VAT or other tax payable, so you get items at the raw cost price plus a small uplift. It's insane, but only to our benefit
With international mail, the general rule is that the sending end keep any fees and the delivery end do their part for free - the logic is that the costs will balance out, the assumption being that traffic is equal in both directions.
Of course, in this case the Chinese will be sending us FAR more packages than we send them, so there will be a definite imbalance in costs and we (the UK) are therefore subsidising the costs of this "free" mail service.
Because of the imbalance in volumes, counties agree "terminal dues" between themselves - this is normally based in the weight differences in tonnes, i.e. if China send us "x" more tonnes than we send them, they pay a terminal due based on that excess tonnage - the Universal Postage Union (UPU - part of the UN) administer this settlement as part of their remit.
There is no VAT or other tax payable, so you get items at the raw cost price plus a small uplift. It's insane, but only to our benefit
With international mail, the general rule is that the sending end keep any fees and the delivery end do their part for free - the logic is that the costs will balance out, the assumption being that traffic is equal in both directions.
Of course, in this case the Chinese will be sending us FAR more packages than we send them, so there will be a definite imbalance in costs and we (the UK) are therefore subsidising the costs of this "free" mail service.
Because of the imbalance in volumes, counties agree "terminal dues" between themselves - this is normally based in the weight differences in tonnes, i.e. if China send us "x" more tonnes than we send them, they pay a terminal due based on that excess tonnage - the Universal Postage Union (UPU - part of the UN) administer this settlement as part of their remit.
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