China's ruling State Council has announced it will ease restrictions on foreign couriers delivering packages nationwide, Reuters reports.

The State Council statement said it had been decided to "fully liberalise" the market for parcel delivery to promote competition between domestic and foreign firms.

Foreign firms that meet certain criteria could take part and would also encourage mergers in the sector, though it gave no indication of criteria or restrictions involved.

While FedEx Corp and United Parcel Service (UPS) operate express parcel delivery services in China, DHL gave up trying to beat the red tape and thin margins to focus on international shipments instead.

Thanks to China's surging e-commerce, express parcel delivery is booming with revenues doubling to US$13 billion over the last five years.

Under the law, banning foreigners delivering mail, courier companies must obtain municipal licences to deliver packages in China and local firms have an inside track.

State-owned China Post dominates the market drawing CNY14.5 billion (US$2.36 billion) from delivering mail last year.

Some 35,000 express delivery firms operate in China, "local heroes" who ship packages hundreds of miles the same day for $0.32 against US Postal charges of $10.

Both the American and European chambers of commerce welcomed the news in separate statements.