BEIJING (Reuters) –

Top global logistics firm United Parcel

Service (UPS.N) hopes to buy a firm in China and boost staff

there in coming years, and said on Monday that paying billions

for rival TNT (TNT.AS) would devalue its own shares.

UPS, a bellwether of the U.S. economy along with rival

FedEx Corp (FDX.N), last month posted earnings in line with

expectations but hit by rising fuel costs and a weak economy.

Trying to drive growth beyond a U.S. market that accounts

for more than half its revenue, UPS will be opening two $180

million transport hubs in China and wants to nearly quadruple

its staffing there in the next few years, hoping to serve

growing demand for delivery services within a relatively

untapped market.

“U.S. consumers are not buying, but I think the great

opportunity for us internationally is business that never

touches U.S. shores.,” Dan Brutto, the president of the

company’s international business, told Reuters in an interview

on Monday.

A TNT deal is “something that devalues our shares,” he

added. “But we always look at different things and try to fit

into the puzzle.”

Shares in TNT (TNT.AS), Europe’s No. 2 mail and logistics

firm, leapt more than 6 percent on Monday after a Sunday

Telegraph report that UPS was planning a 10 billion euro ($15.2

billion) bid.

UPS has doubled its headcount in China over the past 18

months to around 5,300, but expects that number to increase by

at least 1,000 annually over the next 3-4 years, said Brutto.

It’s now looking for acquisitions within the world’s fourth

largest economy, despite fears that Chinese growth will taper

off over 2008 and 2009.

“You could say UPS China should really have 25,000

employees. The business is out there,” Brutto said.

($=6.85 yuan)

(Reporting by Michael Wei and Kirby Chien, editing by Edwin

Chan)