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The Straits Times, Singapore: Food and fuel price hikes spark protests in China Leaders promise to tackle inflation as analysts
China Labour Bulletin appears in the following article. Copyright remains with the original publisher
Dec 7, 2007
BEIJING - FIRST, illegal land seizure, pollution, corruption - and now inflation. Food and fuel price hikes have sparked at least two protests by factory workers and taxi drivers in recent weeks and observers warn of the potential for more trouble if inflation worsens.
Beijing on Wednesday showed that it is worried about the rumblings on the ground by vowing to make fighting inflation its top task in the coming year.
Analysts said yesterday the decision taken at a top-level annual economic policy meeting to tighten monetary policy - for the first time in 10 years - was also intended to signal that Beijing is acting to tame the overheating economy.
Economist Yi Xianrong of the Chinese Academy of Social Sciences said:'Beijing recognises the danger that an economic problem can turn into a political and social issue.'
Also on Wednesday, a foreign news agency reported on a large-scale strike by taxi drivers in the north-eastern industrial city of Harbin to protest against high management fees and fuel price hikes.
Last week, several hundred police were reportedly called in when workers at a southern Guangdong electronics factory rose up in arms over rising food expenses docked from their wages.
There was, however, no mention of the two incidents in the Chinese media.
It is not surprising that workers, those worst hit by the soaring costs of food, fuel and housing, are expressing their anger and demands through organised strikes, said Professor Hu Xingdou, an economist at the Beijing Institute of Technology.
He added that on a recent trip to the south-eastern boom town of Zhejiang, he learnt that workers at many companies were on strike to demand higher wages.
Mr Geoffrey Crothall of the Hong Kong-based labour rights group China Labour Bulletin said that if blue-collar wages do not keep up with rising costs, there could be more strikes ahead.
With China facing a worsening income gap and environmental woes, officials say 'mass incidents' rose from 10,000 in 1993 to 74,000 in 2004. This April, a top official reported that the 2006 figure was 16.5 per cent lower than the previous year's.
But inflation has become the latest worry for Chinese leaders. It hit a 10-year high of 6.5 per cent in August and October, and officials have forecast a rate of 4.7 per cent for this year and 4.5 per cent for next year.
Last month, China raised fuel prices for the first time in 17 months to tackle widespread shortages and appease loss-incurring refiners.
To soften the blow, the populist government has dished out food subsidies to farmers, students and low-income groups. Some cities have given their taxi drivers fuel subsidies. On Wednesday, Beijing announced more rebates for oil refiners to further ease shortages.
Those measures will help keep things under control while more macro-economic adjustments are made, said Professor Yi.
He also pointed out that China is not seeing the massive shortage in the supply of goods during periods of inflation in 1989 and 1993.
The 1989 Tiananmen Square demonstrations - sparked initially by inflation - cannot be far from top leaders' minds.
And when state-affiliated labour unions do not act in the workers'
interest, 'workers have only the option of staging a strike to bring attention to their plight', said Mr Crothall.
'Often, it's a gradual build-up of dissatisfaction, and then a seemingly small thing like a hike in canteen food is the final straw,' he pointed out.