China says it expects to lay off 1.8 million workers in the coal and steel industries, or about 15 percent of the workforce. As Hayley Platt reports, it's all part of efforts to reduce industrial overcapacity, although no timeframe was given.
China's slowdown has been much talked about. But for the first time official figures have been released to underline the magnitude of the problem. Although no time scale has been given - the National Bureau of Statistics expects 1.8. million workers in China's coal and steel industries to lose their jobs. That's around 15 percent of the workforce. The government has set aside 100 billion yuan or $15 billion to relocate workers over the next two years, according to China's Vice finance minister. (SOUNDBITE) (Mandarin) CHINESE VICE FINANCE MINISTER, ZHU GUANGYAO, SAYING: "As China cuts down on over-capacity, it especially needs to properly handle the employment issue. Over-capacity in some industries has led to job losses." The official unemployment rate in China currently stands at around 5 percent. Although many economists believe the real figure could be higher. Avoiding more job losses as China tries to move towards a consumer led-economy is the big challenge. But there could be benefits for other countries, says Justin Urquhart-Stewart is from Seven Investment Management. SOUNDBITE (English) SEVEN INVESTMENT MANAGEMENT, MARKETING DIRECTOR, JUSTIN URQUHART-STEWART, SAYING: "You've got huge over production at the moment and if you start cutting back on that over production you're actually going to mean there's less chance of stock being dumped everywhere at a cheap price so that's actually good news for the European and American steel production, the trouble is it's going to take some time." China's central bank is trying to cushion the blow from job losses. It's injecting an estimated $100 billion into the economy. It's also cutting the amount of cash banks must hold as reserves, taking the ration to 17 percent for the biggest lenders. ///