China's inflation problem is boiling over!
SHANGHAI, China - April 23, 2011 - 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% jump in food prices, China’s annual inflation rate surged to 5.4% in March, the highest in more than 2 ½ 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.
