HONG KONG (Dow Jones) – FedEx Corp. said its express parcel delivery business in China continues to gain market share, but competition with local rivals remains very tough.

The company is seeing "good growth" in its business in China, which it launched in 2007, David Cunningham Jr., Asia-Pacific president of FedEx's core express segment, told Dow Jones Newswires on Thursday.

He said FedEx's key selling point is a high level of reliability, but it must keep rates attractive as Chinese consumers are very price-conscious.

"We aren't the price leader from the standpoint of (having) the lowest prices but we have to be competitive...in the marketplace," Cunningham said. He declined to provide specific figures on the China business.

In 2007, FedEx paid US$400 million to buy out its local joint venture partner. Later that year, the Memphis, Tenn.-based company launched next-business-day domestic parcel deliveries to more than 30 Chinese cities.

Cunningham said the company will continue to expand the areas it covers in China, including the less affluent but expansive western part of the nation.

"Western China represents 50 percent of the population of China so I think we will have to continue to move into those areas," the executive said.

Cunningham said the new law banning foreign companies from delivering express mail inside China is unfair and has affected FedEx's growth ambitions in the country.

"We think we ought to be able to compete on a level playing field. To exclude foreign firms from the domestic document business takes away from the Chinese consumer a capable competitor," he said.

The new postal legislation took effect this month, dealing a blow to companies such as FedEx and rival DHL Worldwide Express Inc. of Germany. The firms have lobbied for years against the new rules.

For now, Cunningham said FedEx will concentrate on developing its package delivery business model in China.

FedEx's Asia-Pacific hub is at Guangzhou's Baiyun Airport. The sorting facility, which opened in February, replaced Subic Bay in the Philippines as the company's main hub in the region.