BEIJING (BLOOMBERG) - China will further trim its bloated smokestack industries this year and support other sectors in services or internet-related businesses to create new jobs.
The country plans to eliminate another 500,000 jobs in industries with excess capacity, Minister of Human Resources Yin Weimin said at a briefing on Wednesday (March 1) in Beijing. That's part of an effort to trim 1.8 million employees in steel and coal over a few years. About 726,000 jobs were cut from those industries last year, Yin said.
China has vowed to tackle inefficiency and pollution in industries with excess capacity, aiming to do so without stirring social unrest from mass layoffs. The central government has allocated 100 billion yuan (S$20.5 billion) to subsidize the transfer of displaced workers, with more than 30 billion yuan spent last year, according to Yin.
"Settling displaced employees is the top priority in cutting overcapacity," Yin told reporters, adding that typical ways to relocate workers include early retirement, retraining for new positions and encouraging them to start their own businesses. "We're going to make sure the process goes in a steady and orderly manner this year," Yin said.
While it cuts heavy industries, China also seeks to bolster service sectors to ensure there are enough new jobs for its massive labor force. Yin said the government will probably roll out policies to support internet-based sectors that are creating a large amount of new jobs.
Underscoring the need to keep the labor force humming, a record 7.95 million college students will graduate this year. Policy makers will encourage these youngsters to seek jobs in smaller cities or less-developed western areas, Yin said.