BEIJING -- China's State Post Bureau (SPB) is separating government functions from its business practices, and its mail delivery services will become more market-oriented.

In a recent circular, the bureau announces the formation of provincial agencies in Zhejiang, Shandong, Sichuan, Shaanxi and Tianjin in the name of Post Management Bureau. And other bureaus of the kind will be set up successively.

With staff members mainly coming from traditional state-owned post bureaus, these re-organized management bureaus are under the direct administration of the SPB instead of the jurisdiction of local governments.

They are responsible for implementing China's laws and regulations on the management of postal industry, working out related polices and standards, and supervising the development of postal market.

They also take charge of special postal services such as confidential correspondence, correspondence for compulsory military servicemen, distribution of the newspapers and periodicals owned by China's Communist Party, and the delivery of reading matters for the blind.

In the meantime, profit-making postal services will be put into a national postal corporation which competes with other companies in the postal industry, including the delivery businesses from abroad.

Since China's accession to the World Trade Organization in 2001, a number of overseas postal delivery giants including UPS, FedEx and DHL have tried to expand their presence in China.

Under traditional mechanism, state-owned post bureaus stand as both a judge and a player, and foreign competitors as well as private companies are disadvantaged.

A senior SPB official told Xinhua that the reform is carried out in line with the demand of China's economic reform.

A similar institutional reform occurred in 1998 when the Ministry of Information Industry was established to replace former Ministry of Electronics and Ministry of Posts and Telecommunications whose administrative functions were also mixed with those of market-related services.

What followed was the government-led separation of the monopolistic China telecommunication conglomerate into three independent corporations and more licenses to telecom operators, which has led to nowadays opener and brisker telecommunication market.

SPB Annual Report said that China's post bureaus raked in aggregated 5.03 billion yuan last year, up 5.3 percent over that of 2004, and they delivered nearly 7.35 billion mails.