China Inflation And Wage Protests Spread, Turn Violent

Tyler Durden's picture

Yesterday we reported news that has so far received almost no media exposure, namely that thousands of striking truck drivers had poured into Shanghai's Waigaoqiao zone, one of the city's busiest container ports, protesting over "rising fuel prices and low wages." Today, via Reuters, we learn that this situation has escalated materially, and progressed into violence: "A two-day strike over rising fuel prices turned violent in Shanghai on Thursday as thousands of truck drivers clashed with police, drivers said, in the latest example of simmering discontent over inflation. About 2,000 truck drivers battled baton-wielding police at an
intersection near Waigaoqiao port, Shanghai's biggest, two drivers who
were at the protest told Reuters. The drivers, who blocked roads with their trucks, had stopped work on Wednesday demanding the government do something about rising fuel costs, workers said." And while we have violent uprisings over austerity in Europe, now we have violent strikes over inflation in China? The question thus now is just how much longer will China continue to take massively ineffective steps such as RRR and rate hikes, both of which have been a tremendous failure in reining in inflation, instead of picking the nuclear option of revaluing the currency. And while many believe China may announce something along those lines over the weekend, Win Thin, global head of emerging market strategy at Brown Brothers Harriman, is not so sure and put the odds of a yuan revaluation at 25%. "With regards to currency policy, we are putting forth the following three possibilities along with odds: 1) keep current pace of appreciation (10%), 2) do one off revaluation (25%), and 3) speed up pace of appreciation (65%)." Either way, with more people joining the populist movement against inflation, China is now between a rock and a hard place: will it continue happily importing Bernanke's inflation exports or finally retaliate. Unfortunately for its economy, the appropriately called "nuclear option" of revaluation, will leave it export economy flailing. So the real question: is China ready to migrate from an export-led to a consumer-led model. Alas, the answer is a resounding no.

More on China's now violent protest:

"I want the government to stand up to solve our problems because we cannot take this anymore. We are unable to bear the cost of operating now," said a driver surnamed Chen, 33, a native of Henan province who has been driving for eight years.

The strike comes against a backdrop of rising consumer prices and fuel price increases. China's inflation rate hit 5.4 percent in March, prompting officials to renew vows to use all available means to contain price rises.

Police arrested at least six people and beat up some protesters with batons, said Chen and another driver also surnamed Chen, 35. They declined to give their full names or the name of their company for fear of reprisals.

Both drivers, who work for a small transport company, showed photographs to two Reuters reporters of police carrying a man with a bloodied head, with his wife and daughter at his side.

Repeated calls to the Shanghai public security bureau and the municipal government went unanswered.

Worse, the strikes are now metastasizing to other cities:

Truck drivers also staged strikes in other ports in Shanghai including Baoshan and Yangshan, the drivers said.

The strikes and protests, if they continue, could become a worry for the ruling Chinese Communist Party, which fears public discontent that could erode its authority and alarm investors.

Workers say their wages have not kept up with rising prices.

One wonders why the Chinese, living under an authoritarian regime are willing to engage in violent protests with far more dangerous personal consequences, while the American peasant continues to gladly accept $5 and soon $6 oil:

The 33-year-old Chen said his disposable income had fallen to 4,000 yuan (370.28 pounds) a month, from 6,000 to 7,000 yuan a month last year.

The 35-year-old Chen said he was still on strike, together with what he estimated were thousands of others.

At a parking lot three blocks away from the protest site, about 30 anti-riot policemen arrested two truck drivers and dispersed a crowd of 50 to 70.

Earlier, other truck drivers had driven past, shouting to their fellow drivers to "join the strike, stop driving."

What is sure, is that the immediate impact of the strike is already being felt:

ROE Logistics, a Montreal-based customs broker and freight forwarder, issued a statement on Wednesday about a strike at a Shanghai port, saying it could result in delays.

"Delays in receipt of export containers may result in possibleknock-on effects to sea freight with possible delays or rollovers from carriers," the firm said.

An employee in Shanghai from another shipping company, New York-based Ocean World Lines, confirmed there had been a strike but declined to give other information.

"This is a sensitive topic. I really don't have any other information," Max Wang told Reuters.

And while it is logical that China's propaganda machine would not talk about this development, why other "democratic" countries have said nothing about this is just a little strange:

China's state media has been silent on the protest, underscoring the sensitivity of unrest for the ruling Communist Party, which normally stamps out protests fearing a threat to stability.

China said in early April it would increase retail gasoline and diesel prices by 5-5.5 percent to record highs.

The good thing is that China now has hit its breaking point. Any inflation beyond current levels will only make matters worse. So the ball is in the politburo's court. Alas, as central planning does all too well, expect the decision taken to be the worst possible one for both China's and the global economy.

h/t Christopher

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lolmao500's picture

China revolt/crash will save our economies... If we can hang the bankers and the corrupt scumbags in office too.

 

Only China crashing will make our corrupt system continue for at least a few more years. So... let the US crash before... then we hang the bankers, then China crashes... then we are golden.

tmosley's picture

What?  No.

The only way we survive a Chinese crash at this point is if we manage to rebuild our industrial base first.

What do you think will happen when cheap Chinese goods are suddenly no longer available?  Endgame for America (and other Ponzi economies), that's what.

Rodent Freikorps's picture

Improvise, adapt and overcome.

It is the American way.

Ivanovich's picture

+1. 

 

So Americans are forced to no longer buy worthless plastic crap they hoard in every room of their stuffed houses.  So the hell what? 

The real question is what happens to the Treasury market.

margaris's picture

Amen.

It is time everyone remembered what he really needs to survive. Air, water and food.

Everything else is crap.

Life will go on.

Mr Lennon Hendrix's picture

Survival is a brutish thing without love.

New_Meat's picture

Jimi would understand:

"nasty, brutish, and short"

http://en.wikipedia.org/wiki/Leviathan_%28book%29

John would be imagining something.  Go figure.

- Ned

mworden's picture

solitary poor nasty brutish and short

Zardinuk's picture

Yup, everyone remember air water and food. Ah shit, what're we going to do when the 90% of the country that doesn't stockpile food is rioting over food prices?

NidStyles's picture

Swap them rioting and air for Pb, and Cu.

1100-TACTICAL-12's picture

I try my best not to buy chinese crap, it is damn near impossible...

SteveNYC's picture

Unfortunately, if anybody thinks more than perhaps 1% of the population is prepared for anything like this, they are mistaken.

The sheep have been reared from birth to believe they are entitled to a world that the advertisers have created, one in which you can have that new car, 3 kids in college, a big house, all the plastic shit you need etc. and never have to worry about a thing.

There will be a collective mental breakdown, nobody knows how that may turn out.....

tomster0126's picture

Exactly, I've been spending minimally since the '08 crash and have been living a much happier, cleaner life.  We need to stop relying on Chinese plastics and utilize industrial hemp as a source of plastics and other material!

 

www.forecastfortomorrow.com

tmosley's picture

Once and future way.

Not the present, sadly.  Some keep the flame alive, though.

Michael's picture

The Chinese people need to learn how to use Molotov cocktails and burn all the government shit down.

Dr. Richard Head's picture

"A nickel isn't worth a dime today."

or

"When you come to a fork in the road, take it."

- Yogi Berra

tmosley's picture

A nickel is worth between 7 cents and $2.60 today.

Dr. Richard Head's picture

Tis true.  Coin debasement sure makes for interesting conversation, for this crowd at least. Try talking about this shit with the beer drinking baseball crowd and this is what you get - http://www.youtube.com/watch?v=HAVoU_UXgQI&feature=player_embedded

walcott's picture

A nickel is worth more than a dime or a quarter.

And a half cent less than a sacagawea dollar.

Soon to be worth more than said dollar.

Buy boxes of nickels.

Sudden Debt's picture

Molotovs? :)

 

CHINA IS ONE OF THE ONLY PLACES IN THE WORLD WHERE YOU CAN BUY 1 TON OF AMONIUM NITRATE FOR 200$!!

Just google it :)

 

http://www.alibaba.com/product-gs/420962014/calcium_ammonium_nitrate.html

 

Small explosion with 50gr of Ammonium Nitrate:

http://www.google.nl/url?sa=t&source=web&cd=4&ved=0CDIQtwIwAw&url=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3Dkn6hb3kZ2NI&ei=FHqwTdawF8aDOoj1xI0J&usg=AFQjCNGWLjiafEbkt_LARP6O-eR70tDogg

 

http://www.google.nl/url?sa=t&source=web&cd=4&ved=0CDIQtwIwAw&url=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3Dkn6hb3kZ2NI&ei=FHqwTdawF8aDOoj1xI0J&usg=AFQjCNGWLjiafEbkt_LARP6O-eR70tDogg

 

 

 

If these guys want to make bombs, they have very easy access to every chemical a terrorist can dream off :)

 

BOOM CHINAMASTER!! BOOM

Zardinuk's picture

Can you buy blasting caps by the ton too?

Rodent Freikorps's picture

Do you really think the Chinese can overcome the submissiveness that is bred into their bones?

Some chains are stronger than steel.

Sudden Debt's picture

Nothing more dangerous than hungry people.

 

 

topcallingtroll's picture

We got so much junk stashed in garages we dont need new shit for a generation.

Personally i am a strong admirer of afro engineering.

Rodent Freikorps's picture

Pack rats will come into their own.

goldsaver's picture

"Afro Engineering"? Shit, that was funny!

Rodent Freikorps's picture

Didn't they go on strike demanding more government subsidies for laser guided weapons.

WALLST8MY8BALL's picture

Protesting. Another Job American's just dont want to do....

Burnbright's picture

SHIZAM! I think you just won the thread my friend. 

WALLST8MY8BALL's picture

Or maybe just hanging on to one? Thanks Burn.

FIAT_FixItAgainTony's picture

+47 

i spend a lot of time protesting.  i feel it's more of a duty than a job though.  i wish more peeps quit being so wimpy.

<sarc>

slavery or freedom?  gee, i dunno, do i gotta stand?  whats on tv?

*urrrp*

</sarc>

Popo's picture

Those most exposed to oil prices will crack first.   Trucking is particularly sensitive -- and a trucking strike particularly damaging  in its downstream effects.  

My bet is Beijing keeps monetary policy where it is and offers support measures to the trucking industry -- for the time being.

Bleeping Fed's picture

How, by printing more money to pay for more diesel subsidies?

duo's picture

I've had some power tools on the radar for many months.  Looks like it's time to buy them.  Jointer, table saw, stuff that I'll need to make chicken coops for the neighbors.

PS, posted earlier.  Found out this morning that my favorite Subway breakfast sandwich is now HALF the size it was a few weeks ago, but the price dropped to $2.25 from $2.50.  It's also interesting that the menu changed so that there is nothing to compare to what was on the old menu at the old prices.

aphlaque_duck's picture

Jointer? That sounds like a fine chicken coop.

duo's picture

for those that want to keep chickens in their kitchen cabinets.

aphlaque_duck's picture

How do you find replies to your posts on ZH? Maybe I'm retarded but I clicked through my account etc and can't find it.

margaris's picture

My account ---> Track --> All Threads you posted are listed--> Choose one --> Then check for new answers.

WALLST8MY8BALL's picture

My friend on Long Island has one in his back yard. he moves it once every 3 months and then farms the area those sections. Nothing's better than a real fresh egg.

LawsofPhysics's picture

Give them a triple "A" rating.  There, all better.

nah's picture

china for the chinese man man

Rodent Freikorps's picture

The common denominator in all the world seems to be people expecting government to fix things.
Is all of mankind slaves now?

Burnbright's picture

HA! NOW? Dude what do you think civilization runs on?

DR's picture

Government exclusively controls the coin-we have a right to expect fairness. Private business NEEDS a sound currency in order to thrive.