China expects to lay off 1.8 million workers in coal, steel sectors

Mon Feb 29, 2016 7:31am EST
 
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By Kevin Yao and Meng Meng

BEIJING (Reuters) - China said on Monday it expects to lay off 1.8 million workers in the coal and steel industries, or about 15 percent of the workforce, as part of efforts to reduce industrial overcapacity, but no timeframe was given.

It was the first time China has given figures that underline the magnitude of its task in dealing with slowing growth and bloated state enterprises.

Yin Weimin, the minister for human resources and social security, told a news conference that 1.3 million workers in the coal sector could lose jobs, plus 500,000 from the steel sector. China's coal and steel sectors employ about 12 million workers, according to data published by the National Bureau of Statistics.

"This involves the resettlement of a total of 1.8 million workers. This task will be very difficult, but we are still very confident," Yin said.

For China's stability-obsessed government, keeping a lid on unemployment and any possible unrest that may follow has been a top priority.

The central government will allocate 100 billion yuan ($15.27 billion) over two years to relocate workers laid off as a result of China's efforts to curb overcapacity, officials said last week.

China's vice finance minister Zhu Guangyao quoted Premier Li Keqiang as telling U.S. Treasury Secretary Jack Lew on Monday that the fund would mainly focus on the steel and coal sectors.

The number of layoffs was reasonable based on the government's capacity closure targets, said Jiang Feitao, an industry researcher with the China Academy of Social Sciences, a top government think-tank.   Continued...

 
A labourer marks steel bars at a steel and iron factory in Huai'an, Jiangsu province, China, in this February 18, 2008 file photo. REUTERS/Patty Chen/Files