Shanghai Truck Drivers Win Port-Fee Cut as Wen Eyes Unrest Risk
April 23, 2011, 9:10 PM EDTBy Bloomberg News
April 24 (Bloomberg) -- Shanghai container-truck drivers were reported to have won cuts in port fees after a sometimes violent protest against rising costs highlighted the risk of inflation triggering unrest in the world’s most populous nation.
The local government will lower or remove some fees after drivers stopped work on April 20 because of the levies and increased fuel costs, Xinhua News Agency reported, citing an unidentified spokesman. The city’s ports are operating normally, the report said.
Premier Wen Jiabao’s campaign to tame the fastest inflation since 2008 has spanned interest-rate increases, higher reserve-requirements for banks and requests to companies including Unilever NV to delay price increases. An acceleration in consumer-price gains to an annual 5.4 percent pace in March, with food costs rising 12 percent, suggested that the government may need to take additional measures.
“Policy makers are sensitive to the strains on lower- income households,” David Cohen, a Singapore-based economist at Action Economics Ltd., said late yesterday. “China will use a combination of measures to combat inflation -- perhaps we will see some more direct price controls.”
Wen last month described inflation as like “a tiger” that once uncaged can be difficult to recapture and added that rising prices may undermine social stability. Gains by the Chinese currency, the yuan, are another tool that could counter inflation pressures, by reducing the cost of imports.
Dockyard Protests
In Shanghai, China’s busiest port city, protesters blocked a dockyard on April 20 and smashed the windows of trucks whose drivers refused to take part in the demonstration, the Associated Press reported. Police arrested at least eight people who tried to overturn a car, it said.
Truckers blockaded a dock in Pudong district in on April 21, AP said in another report, citing a logistics company employee. On April 22, more than a dozen police vehicles were deployed around Shanghai CIMC Vehicles Logistics Equipment Co. near Wusong port in the Baoshan district. That day, several hundred truck drivers demonstrated as police blocked off an intersection, the AP reported.
The Shanghai government’s press office hasn’t responded to calls from Bloomberg News for comment.
Cohen said he didn’t see any “serious” disruption to the Chinese economy from the events in Shanghai. At the same, he said, the protests highlighted how measures such as increases in lenders’ reserve requirements and in interest rates “don’t provide very much immediate relief to those people like truck drivers.”
Warehouse Charges
The truck drivers complained warehouse operators introduced a new charge of 50 yuan ($7.7) in October for trucks that pick up more than one container, AP said, citing driver Zhao Feng.
The strength of China’s rebound from the financial crisis, a record expansion of credit in 2009 and 2010, and this year’s surge in commodity costs have increased the threat from inflation.
“We cannot allow price rises to affect the normal lives of low-income people,” Wen told lawmakers at the annual meeting of the National People’s Congress in Beijing last month. “This problem concerns the people’s well-being, bears on overall interests and affects social stability.”
China’s economy grew a more-than-forecast 9.7 percent in the first quarter from a year earlier.
--Editors: Paul Panckhurst, Dick Schumacher.
To contact Bloomberg News staff for this story: Paul Tighe at ptighe@bloomberg.net.
To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net
