China Small Packet, which is slow, is cheap, but once something is a reasonable size or weight it becomes quite expensive, as does any faster shipping method.
As far as subsidizing their Postal service, that's a difficult charge to support ... virtually every national postal service is supported to the extent that losses are covered by the national treasury if and when they occur. Unlike many utilities, the Postal Service is like Police ... a very old concept, for starters, and one that is considered necessary for the national good. In some cases and many nations the postal service actually pre-dates police; they delivered mail when only the military was available to keep the peace.
Where it differs from an ordinary delivery service is that it will service every corner of the nation ... for example UPS and FedEx can (and do) refuse to deliver to some areas or communities, the Postal System does not. It's this aspect that makes it exempt from accusations of unfair competition, as it does things the private sector is not obligated to do. You won't get far accusing this or that nation of subsidizing the post. It's essentially off-limits to criticism.
If anyone is interested in further investigating the issue, you could research UPS's two lawsuits vs Canada Post, where they essentially argued that delivering parcels was illegal (and Canada Post is a corporation, one that has a history of delivering profits, not losses, and is not an arm of government).