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Inflation led social unrest bites Shanghai exports

April 25, 2011

As oil prices soared above US$110 per barrel, China vehemently displayed what India’s democratically free citizens have done all along – protested the rise of fuel hikes by striking enmasse until the government reels in to their whims.

Although strikes are not uncommon in China – approximately 200 taking place on a yearly basis, few are reported on. The last major strike was over wage hikes in South China’s manufacturing belt after a worker at the Foxconn factory committed suicide. However, the fact that the truckers strike since last Wednesday has hit international media throws light on how hard inflation is biting the average Chinese again.

Having just dealt with dousing the embers of the Jasmine Revolution that were feared to have spread like wild fire throughout the mainland, the Shanghai government moved to placate truckers who had been protesting and striking at the world’s busiest port since Wednesday, ordering authorities to cut fees and reduce tolls in a bid to get drivers back to work.

Striking a raw nerve with Beijing, the truckers demands were slightly satiated on Saturday after the Shanghai government released a paper mentioning alterations in port cost structures, by Sunday evening the strike had mostly abated, with port operations returning to near normal. The decree, which was signed by four government departments, said new logistics fees should be borne by companies that were transporting goods, not by the transporters. Logistics centres might be eligible for government assistance if the new measures created financial hardship for them, the statement added. The strike at Shanghai’s port, which involves more than 600 trucks had crippled exports worth millions  from the world’s largest exporting nation.

Truck drivers at several ports around Shanghai had been protesting against what they say are unfair fees from container loading centers and complaining that the rising cost of diesel makes it impossible for them to make ends meet.

Trucking is big business in China, with road freight revenues amounting to US$129.7 billion last year, according to research from Datamonitor. And for young men from the countryside, buying a truck to tap into that sector is a big step up the economic ladder.

But while almost everyone else in China has seen their incomes increase in recent years, truckers have experienced the reverse, with fuel price rises the main reason for that.

State-set diesel prices are at historic highs, with China’s diesel price now more than 30 per cent above its 2008 peak due to recent reforms. For independent truckers, their vehicles have become a burden.

“We have no way out, and that’s the truth,” Mr Liu says. He has tried selling the lorry he bought for Rmb30,000 ($4,600) – roughly three years’ salary – after working on construction sites for 20 years, so he can try his hand at something else. But he has not been able to find a buyer

In order to quell social unrest the Shanghai Government on Saturday, called on container shipping centres to ‘clean up all kinds of unreasonable fees’ by canceling or lowering a range of fees, including those for unloading containers, road tolls, and higher charges for night-time loading.

In a nod to taxi drivers, who have also been complaining bitterly about rising fuel costs, the government statement said it was considering ways to lessen the cost burden on them and would announce measures soon. Activists have said that taxi drivers might be considering a strike similar to the truckers’ action.

Part of the reason authorities were so swift to stifle any news of the strikes and violence in Shanghai is because taxi drivers have also been complaining loudly. Two weeks ago Beijing doubled the fuel surcharge for long trips in a bid to appease taxi drivers’ complaints.

Chinese taxi drivers have historically been relatively quick to organise. In late 2008 a strike by taxi drivers in Chongqing inspired similar actions in Guangzhou, Sanya, Shantou and other cities. Earlier this year, cabbies in Zhengzhou briefly went on strike to protest against a new overtime rule.

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