China admits up to 500,000 steel job cuts could be necessary

A Chinese government minister has reportedly stated at a press conference that China may need to eliminate as many as 500,000 jobs in the steel sector to bring that industry in line with its needed production capacity.

A Reuters article on Monday, Feb. 29, 2016, says Yin Weimin of China’s Ministry for Human Resources and Social Security disclosed at a press conference that the central government has determined that some 1.3 million coal sector workers and 500,000 steel industry employees may need to be laid off, largely at state-owned enterprises (SOEs).

The Chinese press, which largely reports within suggested government parameters, recently has been quoting government ministers who acknowledge that “zombie mills,” operated largely by SOEs, are to blame for an overcapacity problem in the Chinese steel sector that has angered steelmakers in other parts of the world.

The Reuters report quoting Yin may be the first where a government employee has attached an employment figure to the problem. Yin also reported said that reaching settlements with the 1.8 million workers in the two sectors “will be very difficult.”

Some coal industry layoffs have been announced in the previous nine months, including a reported 100,000 job cuts by Heilongjiang Longmay Mining Holding Group Co., an SOE based in northern China in late 2015. No such mass cuts have yet been announced in the steel sector.