◎ The trucker strikes are the latest instance of mass social unrest that has broken out in China in recent months.
Truck drivers in several provinces across China started going on strike starting from June 8. The drivers also encouraged others in trucker WeChat groups to carry out a nation-wide strike on June 10.
大陆的卡车司机已经喊出口号:打倒共产党!大家加油啊，支持大陆的卡友。 pic.twitter.com/NfHqmT21wE
— Henry Bai (@henrybai8) June 10, 2018
The trucker strikes are the latest instance of mass social unrest that has broken out in China in recent months.
The backdrop:
1. Presently, truck drivers from Jiangxi, Shanghai, Hubei, Anhui, Chongqing, Shandong, Guizhou, and other regions are involved in the strikes. The strikes see drivers gather and line up their trucks on local expressways, national highways, and in parking lots.
The truckers are demanding lower gas prices and toll fees, higher freight fees, and for the traffic police and transportation authorities to cease imposing arbitrary fines on them for minor violations. The truckers have also released a list of 10 charges detailing how the Chinese government is squeezing them out of business.
In a letter of appeal, the striking truckers write that they are “at our wit’s end” and have “no way out” of the current situation. The letter also calls for truckers across the country to be united in their cause, and threatens to smash the trucks of drivers who refuse to heed the call to strike.
2. In May, school teachers in some cities across China took to the streets to demand their pay cheques. Also, there were several human rights incidents involving retired military veterans.
3. In April, tower crane operators in over 20 provinces and 40 cities across China displayed banners demanding a pay raise.
The big picture:
China’s economy is worsening and faces the problem of oversupply. Meanwhile, already sky-high property prices continue to soar, and unemployment is on the rise as foreign manufacturers withdraw from China.
Our take:
1. The rising social tensions in China can be traced back to the policies of the Jiang Zemin era (1989-2012).
During the Jiang era, GDP growth was an important benchmark that determined official career progression. Many local officials started constructing toll roads as a way to boost GDP growth and even make some money on the side through corruption. Official corruption also meant that the roads were usually of shoddy construction (so-called “tofu-dreg roads”) and had to repair every year or two. The cost of road maintenance, however, was typically passed on to drivers through policy.
Indeed, government policy is a huge reason why freight fees are high in China and private trucking companies struggle to survive. Having to bear the cost of public works and toll feeds aside, truck drivers have to pay a yearly automobile tax. Meanwhile, trucking companies with government links drive down their prices to create a monopoly.
To save costs and stay afloat, many truck drivers resort to violations like spending huge sums to buy military or paramilitary vehicle license plates or overloading. When drivers who overload are caught, the authorities penalize them with uneven or even malicious fines. Corrupt traffic police have been known to impose arbitrary fines on drivers without issuing a fine ticket; when drivers demand a fine ticket, the traffic police proceed to dock them with demerit points.
Uneven goods prices in different cities and regions add to truck driver woes. For instance, while pineapple sells for 3.7 yuan per kilogram in Shanghai and 0.12 yuan per kilogram in Hainan, no buyers are exploiting the price difference because high freight fees make such a venture unprofitable. Truck drivers are also unwilling to make the trip because gas prices are too high and they do not make enough from the cost of freight to cover their expenses.
2. High taxes in China also make it difficult for citizens to make a living.
Li Weiguang, an economics professor from the prestigious Tianjin University, addressed the tax problem in a December 2016 article. He noted that the average corporate tax rate in China “is at, or exceeds, 40 percent,” or in other words, a “tax of death.”
Beijing indicated this year that it is going to reduce taxes, likely in response to huge tax cuts and other pro-business policies recently adopted by the United States. Yet total government fiscal revenue increased by 12. 9 percent (taxation revenue increase by 13 percent) during the period from January to April this year, a curious phenomenon given China’s worsening economy. This phenomenon suggests that local officials are collecting excessive tax and non-tax fees.
3. We believe that China’s social tensions would escalate as its economy deteriorates. With increasing unemployment and rising food prices, strikes may break out in other industries. Faced with mounting social problems, the Xi Jinping leadership would have to find a way to suspend a trade war with America and open up China’s markets to a great degree to attract foreign investment.
