Prepare for Protests

By most accounts, China’s economy is verging on serious trouble.

Factory activity is way down, fears abound about the housing market crashing, and GDP forecasts for next year continue to be revised downward.

There is another, much scarier factor that cannot be factored, analyzed or forecast with much accuracy, and yet prove much more destructive than the quickest of GDP plummets: the wavering spirit of the Chinese people.

Taxi drivers – 8,000 strong – just concluded a strike in Chongqing, after the government caved to their demands. They were striking in part because of fuel shortages (and resulting long lines at filling stations), low base fares (5 yuan), and wages that have not kept pace with the cost of living.

Caijing describes the strike scene well:

Tensions ran high in the city of 13 million during the walkout, which began on a Monday morning.. Taxi drivers refused to take passengers, forcing commuters into packed buses. Businesses were disrupted, rendering the city dysfunctional. Violence erupted as well. Strikers attacked some of the few drivers who stayed on the job. Drivers who picked up passengers had their cars blocked, or even smashed.

The Vancouver Sun also has an excellent story on the rise of protesting in China, which began with an account of protests at a diesel engine factory and noted how China’s “recession” will exacerbate these occurrences.

“It’s not like it started with this recession,” Bob Broadfoot, managing director of Political and Economic Risk Consultancy Ltd., told the Sun. “This recession just intensified it, it’s going to increase it, and emphasize certain dimensions of it…. Part of it reflects growing frustration, with widening income disparities between different groups.”

Tim Clissold tasted what worker protests meant on the micro level in his book, Mr. China: A Memoir. It’s an episode that every foreign business person should be aware of in an increasingly grim-looking economic environment. As this episode proves, in China, protests aren’t always about picketing outside the place of employment. It can be about making violent threats and coming to the brink of acting on them. In this scenario, it involved some strange combination of hostage taking, imprisonment and torture – where none of these things happened but everything almost did at once.

We were held for about nine hours in the tiny room. It had space for a meeting of maybe ten people; the only window had bars across it. At one point there were more than forty screaming workers pressed into the tiny space. One of the original six had been trying to get me to sign a piece of paper that overturned the board resolution.

Throughout the nine hours of shouting and fist-shaking, I didn’t have much time to think. My nerves were ragged and my head was aching, but I was only seriously rattled once when a couple of workers came in, their faces red. They had obviously been drinking heavily and stood in the doorway, swaying gently. Even the Union leader seemed worried at that point and I just prayed that no one would do anything stupid and that there were no knives about.

Mr. Clissold diffused the situation via “the less heroic option of stubborn silence.” The workers eventually walked out.

Will China soon be a land of mass protests on a level much bigger than that which Mr. Clissold experienced? (more…)