China to axe 1.8 million coal, steel jobs
China plans to lay off 1.8 million coal and steel workers as part of the government’s ongoing efforts to reduce industrial overcapacity.
Yin Weimin, the minister for Human Resources and Social Security, said in a briefing Monday that 1.3 million the job cuts will affect coal workers, while the steel sector will lose 500,000 positions, Bloomberg reports.
This is the first time China unveils figures that underscore the scale of its task in dealing with slowing growth and bloated state firms.
In December, Beijing said it would not approve any new coal mines over the next three years and that it would shut more than 1,000 coal mines in 2016, taking out 60 million metric tons of unneeded capacity.
A month later, the world’s largest coal consumer announced it would invest $4.6 billion to close another 4,300 coal mines.
The country, however, has committed to allocate $15.3 billion (100 billion Yuan) over two years to compensate the laid-off workers, Yin said. He also told reporters that the government will release its plan to raise the retirement age in 2016 as the world's second largest economy faces increased pressure from an aging population.
Chinese steel companies have been accused of selling unwanted metal on world markets for less than it costs to produce and export, suffocating local rivals.
Last month, the Europe Union imposed of a new range of tariffs on Chinese steel imports, in an attempt to save thousands of jobs.
Coal consumption in a free-fall
At the same time that Chinese authorities close mines, coal consumption keeps falling. On Monday, the government unveiled fresh data that states China’s coal use dropped in 2015 for the second year in a row.
The use of the fossil fuel declined 3.7% last year compared to 2014 levels, a report from China’s National Bureau of Statistics (NBS) shows. The fall follows a 2.9% decrease in 2014.
Despite the decrease in coal use, many Chinese cities are often blanketed with toxic smog, much of it the result of using the fuel in industries like power generation and steel.
Nearly 300 Chinese cities failed to meet national standards for air quality last year, according to a Greenpeace report.