Hong Kong dockers’ pay sets tone for future strife

May 7, 2013

By Peter Thal Larsen

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Hong Kong’s port strike is over, but the tensions that sparked it remain. Dockers are feeling the squeeze of Hong Kong’s rising living costs, while port operators face challenges from China’s slowing and shifting economy. Labour relations look set to stay tense.

The resolution of the month-long dispute looks like a victory for Hong Kong International Terminals (HIT), operator of the port where the 500 dockers worked. They agreed to return to work on May 6 after accepting a 9.8 percent pay rise – less than half their original demand, and only marginally more than the original offer. The immediate financial effect of the stoppage is minimal. Shares in Hutchison Port Holdings, the Singapore-listed trust that controls HIT, have actually outperformed other operators like China Merchants over the past month.

Nevertheless, the dispute cast a spotlight on Hong Kong’s growing social divisions. The dockers’ decision to target Li Ka-shing, the Hong Kong tycoon whose Hutchison conglomerate is the port’s ultimate owner, gave the strike an added edge. In an echo of the Occupy movement, they camped outside Li’s central Hong Kong headquarters, protested outside his home, and called for a boycott of his other businesses. Hutchison stoked up the rhetoric by comparing the dockers’ tactics to those of China’s Cultural Revolution.

It’s hard to see many other Hong Kong workers adopting similar tactics: the former colony’s service-heavy economy depends mostly on white-collar workers who tend to be less prone to strikes and collective bargaining. Nevertheless, the dispute has dented the reputation of the world’s third-busiest port as efficient and reliable. It has also called into question the viability of HIT’s reliance on contract workers for two-thirds of its workforce.

Over time, these factors may divert shipping traffic to other destinations on the mainland. China’s slowing economy and its gradual shift away from low-cost manufactured exports will add further pressure. Hutchison has some protection from any shift: it owns a port in Shenzhen that handles almost as much traffic as its Hong Kong ports. The dockers have fewer options. Their taste for activism may only speed the decline of the business that employs them.

 

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