At the world's largest port, China's inflation problem boils over

[Poboy]

ANDY HOFFMAN — ASIA-PACIFIC REPORTER
SHANGHAI— From Saturday's Globe and Mail
Published Friday, Apr. 22, 2011 10:00PM EDT


At the world’s busiest container port, China’s inflation problem is becoming an obstacle to global trade.Incensed by spiking fuel costs and consumer prices, truck drivers hauling goods to and from the Port of Shanghai went on strike Wednesday, triggering a major confrontation that drew hundreds of police officers after truckers reportedly blockaded the entrance to a local logistics company.
Even as the crackdown turned violent, the truckers vowed to continue their protest at the port, which moved almost 80,000 containers a day in 2010 and overtook Singapore to become the busiest container port on the planet. The standoff, which is already making an impact on the flow of goods in and out of Shanghai, highlights the challenge that worsening inflation poses to policy-makers in China.

Spurred by a 12-per-cent jump in food prices, China’s annual inflation rate surged to 5.4 per cent in March, the highest in more than two-and-a-half years. The potential for runaway inflation is a serious concern for the Chinese government because, in the past, major consumer price increases have led to civil unrest. Inflation has become the hot-button issue among China’s 1.3 billion citizens: many are struggling to make ends meet as the price of basic necessities such as food has skyrocketed following a frenzied run-up in real estate values.

At a shabby dining hall in Shanghai’s Baoshan district on Friday, a group of truckers said the soaring cost of fuel, coupled with hefty transportation fees, have eroded their profits. “There is too much inflation,” said one of the striking drivers, who agreed to be interviewed but declined to give his name out of fear for his safety. “We will continue to protest, thousands of us are on strike … we are not transporting anything. We have stopped everywhere.”

The government has made fighting inflation a top priority this year. It has raised interest rates and boosted reserve requirements for banks as well as slapping price controls on some consumer staples.

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http://www.theglobeandmail.com/report-on-business/economy/at-the-worlds-largest-port-chinas-inflation-problem-boils-over/article1995984/