if they are literate then they wont drive the cab

Unfunny answer. Also very insulting to all of the literate taxi drivers throughout China.

Most taxi drivers in most cities can read Chinese. I am wondering why Harbin is different.

Because they lack education.

they are illiterate that's why they are driving taxis

There is indeed a serious problem with Harbin taxi drivers.  They are rogue and they can become extremely violent.  I actually know of an instance in which one got into a fight with his Australian passenger and it ended violently and in the end it was the Australian who was carted off.

Firstly, I hate to say it but they automatically assume that most foreigners on the streets of Harbin are Russian.  I had this happen again and again.  Apparently, they have a bad impression of Russians.  That I have only been told.  Often, they will not even stop on the street to pick up a foreigner and if they do stop, there is at least a 50% chance that they will not want to take you to your destination with every excuse possible.

I have taken taxis all over China from the white-glove radio dispatched taxis of Guangzhou to really terribly poor and lamentable little jitney-type taxis in the hinterlands but Harbin taxi drivers are in a class by themselves, at least IMHO, and at least as foreigners are concerned.

I dont think Harerbin drivers r illiterate.
I'm chinese,I know its nearly impossible for a illiterate man to become a taxi driver.As I know,it never happen in China.How do you know they r illiterate?

I lived in Harbin a year, used a taxi almost every day, and had very few issues with the drivers.  A few tried to screw me over or took me the wrong way, but that was the vast minority of the time.

Here's my tips:

1.  Some can't read because they don't have glasses.  They can see far, not close.  They're not illiterate, they can't see.  Especially true of the older ones.

2.  If you're showing them an address from a list or surrounded by other crap, scratch off everything that isn't the address.  Many times they took me to the wrong address in the list despite all the pointing in the world.  Eventually I learned to scratch off the others in the list.

Alright, let's be anecdotal...I can't begin to tell you the number of times that I was picked up in Harbin by a taxi, driven a little bit to my destination and then the driver simply decided that he didn't want to go there and threw me out and tried to make me pay.

Or the story that I wrote above on how the taxi driver became furious with the passenger and assaulted the passenger ... and the passenger was a female Australian of a certain age.  The other passenges in the taxi tried to intervene and the driver stopped the car and called of some his friends ... what a mess that was.

For a Chinese city, I hate to say it, but Harbin is considered a tad unsafe and in China, that's saying a lot, and that starts with the taxi drivers.  It's one of the few cities that I know of here where I have heard stories, maybe just that, but still stories, about rogue, unlicensed drivers and what they have done to the unsuspecting.

I would encourage caution in taking a taxi in Harbin.  Always check to make sure that you are the only passenger in car.  If the driver stops to pick up other "passengers", particularly in the evening, I would probably rapidly alight from the taxi, and I have done just that.  Be ware of counterfeit notes -- it's a whole racket there.  Keep smaller notes on you because the chances of your being passed a fake 50 or a fake 20 for change for 100 are at least 50%.