They’re implicit subsidies.

So here it goes: there’s an international treaty saying basically “if a letter from your country is delivered in my contry, I’ll deliver it for free and vice versa”. So, you pay your national post some “international handling” so they e.g. deliver it to China, but in China the national post is now responsible for distribution and last mile for free, they don’t see a part of your postage.

So it’s subsidized now by the Chinese post basically: they only charge cents for “international shipping” to their citizens and businesses, last mile is handled for free from the local national post offices.

That system obviously was designed to work frictionless and easy in a time, where there was no globalized market to speak of.

It’s not so easy to reform and just cancel it might be a disadvantage as well: then all your other mailing stuff needs renegotiating as well. Just imagine the horror in canceling the treaty, and then you need to sit down with dealmaker Trump who sees an opportunity in order to get the US Post to handle your mail 😱