The State Postal Bureau has increased the cost of mailing letters and postcards.

Local letters weighing less than 100 grams will cost 0.8 yuan (10 US cents) for every 20 grams, up from 0.6 yuan (8 cents), the bureau announced on its website.

Long distance letters less than 100 grams will cost 1.2 yuan (15 US cents) per 20 grams, up from 0.8 yuan (10 US cents).

Sending postcards will also now cost more, from 0.6 yuan (8 US cents) to 0.8 yuan (10 US cents) each.

The bureau has not mentioned any change in the fee for international mail and other postal services like parcels and Express Mail Service (EMS).

The rise was expected to ease difficulties the postal service is facing and boost its business development, Xinhua News Agency quoted an official from the National Development and Reform Commission as saying.

The news left people on the streets relatively unmoved.

"The rise is only a few cents. Compared with other price hikes, this is really tiny," said Ye Zi, 30, a university lecturer in Beijing.

"People have got used to sending emails nowadays. Few people take the trouble to go to the post office and send a letter," said Wu Jun, 37, who works in an IT company in Beijing. Wu said he has not sent a letter for years.

China's postal system has suffered huge losses since 1998.

Official statistics show it suffered a loss of 398 million yuan (US$49.8 million) last year.

The State Council has approved the plan to establish a State-owned group with a registered capital of US$10 billion that provides postal service.

The State Postal Bureau will remain an administrative body.

The new group will provide services such as domestic and international mail, EMS, postal savings, postal remittance, circulation of newspapers and magazines, and postal logistics.

According to a government statement, the central government will stop subsidizing the group in postal businesses like EMS.

The move is expected to create a fairer environment for competition in the postal sector.