Truckers in Shanghai have mounted three days and counting of protests and work stoppages over rising costs and fees. China’s inflation hit 5.4% in March, which is its fastest pace in 32 months. The truckers contend that rising fuel costs and other expenses are making it impossible for them to be profitable. China’s level of inflation keeps rising despite repeated efforts by the government to constrain inflation. Rising inflation in China poses a risk to its social stability and there are concerns that the public unrest may spread to other sectors of China’s economy. To help calm the unrest, Shanghai officials indicated that they would reduce some fees and acknowledged the legitimacy of some of the drivers’ grievances. The seeming success of the public protests may result in requests for relief by other groups.
QUESTIONS FOR DISCUSSION:
- What should Chinese government officials do to address the truckers’ strike?
- Past events in China indicate the labor unrest and accommodations can spread to other groups and industries. How can China best prevent the current unrest from having a contagion effect on the broader economy?
- Although accounts of the impact of the strike differ, what would be the impact on the global economy if continued labor unrest impacts the pace of activity at the world’s busiest container-handling terminals?
- The desire for economic reform was one of the reasons for the protests spreading across the Middle East. How will China’s likely response be comparable or different from the actions taken by countries in the Middle East?
SOURCE: Areddy, J. T. (2011, April 25). Shanghai lowers truck fees. Wall Street Journal, p. A11. (Retrievable online at: http://online.wsj.com/article/SB10001424052748704123204576282901112237870.html)
RELATED ARTICLE: Areddy, J. T., & Spegele, B. (2011, April 23). Truckers idle rigs in Shanghai. Wall Street Journal, p. A10. (Retrievable online at: http://online.wsj.com/article/SB10001424052748703907004576278672664493778.html)
RELATED ARTICLE: Areddy, J. T. (2011, April 22). Shanghai truckers mount rare protest. Wall Street Journal, p. A9. (Retrievable online at: http://online.wsj.com/article/SB10001424052748704889404576276780540103342.html)
Related video clip: China Truck Drivers Stage Protest. (Retrievable online at: http://www.bbc.co.uk/news/business-13166959)