06/27/2016, 22.45
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Beijing to cut heavy industry, lay off 1.8 million workers

Steel and coal mining are set to get the ax. The government wants to reduce steel capacity by 45 million tonnes and cut output by 280 million tonnes. The chairman of the National Development and Reform Commission is “very confident” that China will reach its targets.

Beijing (AsiaNews/Agencies) – China plans to cut steel production capacity this year by 45 million tonnes and lower coal output capacity by 280 million tonnes, the head of the country’s top economic planner said yesterday.

The capacity cuts would involve relocating 700,000 workers in the coal sector and 180,000 workers in the steel industry, said Xu Shaoshi, chairman of the National Development and Reform Commission.

Speaking at the World Economic Forum in the northern city of Tianjin, Xu added that he was “very confident” that China would achieve the 2016 targets. “The most urgent task is reducing excess capacity,” he explained.

The government has vowed to tackle price-sapping supply gluts in major industrial sectors. In February it had already announced that it would trim steel capacity by 50 to 100 million tonnes and coal output by 500 million tonnes within three to five years.

In order to help local authorities and state-owned firms finance layoffs in the two sectors this year and in 2017, Beijing plans to allocate 100 billion yuan with 20 per cent of the total used to reward high achievers.

Layoffs from the two sectors are expected to cut 1.8 million jobs, according to official estimates.

Still, the government will continue its reforms appropriately expanding aggregate demand to ensure economic growth within a reasonable range, Xu said.

In his view, the government’s target was to achieve annual average growth of at least 6.5 per cent between 2006 and 2020.

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