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Shanghai Strike Threatens China Exports

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A crowd of up to 600 people milled about outside an office of a logistics company near the Baoshan Port, one of Shanghai's ports. Some threw rocks at trucks whose drivers had not joined in the strikes, breaking the windows of at least one truck.

The strikers, many of them independent contractors who carry goods to and from the port, had stopped work on Wednesday demanding the government do something about high fuel costs and what some called high fees charged by logistics firms, said the drivers, who clashed with police officers on Thursday.

As many as 50 police officers were dispatched to the area on Friday, and at least two people were arrested after throwing rocks at trucks.

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.

The crowd thinned out after a policeman said authorities plan to meet with the representatives of the truck drivers on Monday for talks aimed at ending the strike.

"Please disperse and go back," he said with a loudspeaker, telling truckers who had gathered near a road junction. "We are already talking to your representatives. There will be an answer for you on Monday."

Earlier, workers had told Reuters they planned to continue the job action.

"We are continuing our strike," said a 38-year-old truck driver surnamed Liu. "There has been no response from the government or anybody else. There's nothing we can do."

One driver, 31, who declined to give his name, said his transport company was passing on more and more costs to drivers, including for fuel, because it was making losses.

"The market is just a mess now," he said.

Another driver surnamed Liu, 28, said his main problem besides rising fuel prices was that police had started fining drivers for all sorts of infraction without warning - for not meeting environmental standards, for instance.

He asserted that logistics companies were colluding to charge them higher fees.

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

China's tightly-controlled state media has made no mention of the unrest, and nor has the city's government, which is working hard to turn glamorous Shanghai into a global financial hub to compete with Hong Kong or London.

Exports Delayed
An official reached by telephone at Shanghai International Port (Group) Co Ltd, which runs the Shanghai port, told Reuters that the strike "has not affected operations", though would not comment further.

But one executive said the action was already starting to affect the port's operations, at least for exports.

"The strike has delayed exports and many ships cannot take on a full load before leaving," said Wei Yujun, assistant to the general manager at China Star Distribution Center (Shanghai) Co.

"For example, if one ship carries 5,000 containers en route to Hong Kong and the US, now they can only carry 1,000 or 2,000 containers," Wei added.

Shanghai overtook Singapore in 2010 to become the world's busiest container port. The Shanghai port handled 29.05 million 20-foot equivalent units, or TEUs, in 2010 - 500,000 TEUs more than Singapore.

Shanghai's cargo throughput rose to about 650 million tonnes in 2010, remaining the world's largest, up from 590 million tonnes in 2009.

The unrest is occurring near at least two of the port's five major working zones - Waigaoqiao, a massive free-trade zone and bonded storage warehouse, and Yangshan, a deep water port.

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

Last May, a burst of labour disputes disrupted production for many foreign automakers including Toyota and Honda, which laid bare the rising demands of China's 150 million migrant workers and raised questions about the region's future as a low-cost manufacturing base.

"The most fundamental issue from the strikes last year still has not been resolved, and that is that workers still need their rights," Li Qiang, Executive Director of China Labor Watch, told Reuters from New York.

"In China, workers aren't permitted to have independent unions. The most basic issue isn't simply that fuel prices are rising. It is that when fuel prices rise, the truck drivers don't have an independent channel to express their interests."

Situated at the middle of the 18,000 km-long Chinese coastline, the Shanghai port is managed by the publicly listed Shanghai International Port (Group) Co Ltd , which is 44.23 per cent owned by the Shanghai Municipal Government.