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China to lay off 5-6 mln workers

Tuesday, March 01, 2016 - 01:43

China aims to lay off 5-6 million workers from ''zombie enterprises'' to curb industrial overcapacity and pollution, according to sources. Ryan Brooks reports on why that could leave Beijing with an even bigger problem on its hands.

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China's plans to lay off nearly 2 million workers may just be the tip of the iceberg... Sources exclusively telling Reuters that up to 6 million Chinese could lose their jobs in the next few years. The government is taking aim at so-called 'zombie firms' in state-backed industries like steel and coal. They want to cut expenses and pollution. But as Reuters David Stanway says, that could leave Beijing with an even bigger problem on its hands - civil unrest. SOUNDBITE (English) REUTERS CORRESPONDENT, DAVID STANWAY, SAYING: "The problem here is that a lot of the job cuts are going to be in particular regions- and these regions are struggling already. Hubei is the region that is struggling the most from 'zombie firms', there are already hundreds of steel mills that are on the verge of closure. Hubei also surrounds Beijing. So if you have a hundred thousand laid off workers in Hubei, they could easily flock into Beijing and cause pressures on the authorities in capital." This isn't the first time Beijing's cut state workers en masse. Layoffs were a simple solution to economic troubles in the 90s, but since then, times have changed. SOUNDBITE (English) REUTERS CORRESPONDENT, DAVID STANWAY, SAYING: "During the Asian financial crisis, there were 25-30 million layoffs over a period of six years. The difference here now is that the workers are - its very difficult to retrain them. And to bring people who've been working in mines or factories for 30 years into the new economy, into services, into high tech is going to be a huge challenge for the government. China says its pledging over 15 billion dollars to retrain the millions it plans to lay off. But with the possibility of three times as many workers losing their jobs, there's no saying whether that will be nearly enough.

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China to lay off 5-6 mln workers

Tuesday, March 01, 2016 - 01:43