China aims to lay off 5-6 mil­lion state work­ers

The Pak Banker - - 6BUSINESS -

China aims to lay off 5-6 mil­lion work­ers from "zom­bie en­ter­prises" over the next two to three years as part of ef­forts to curb in­dus­trial over­ca­pac­ity and pol­lu­tion, two sources with ties to the coun­try's lead­er­ship said.

The govern­ment's plans to lay off five mil­lion work­ers in in­dus­tries suf­fer­ing from a sup­ply glut would be the coun­try's bold­est re­trench­ment pro­gramme in al­most two decades, one source said.

The re­struc­tur­ing of sta­te­owned en­ter­prises from 1998 to 2003 led to around 28 mil­lion re­dun­dan­cies and cost the cen­tral govern­ment about 73.1 bil­lion yuan ($11.2 bil­lion) in re­set­tle­ment funds.

A se­cond source with lead­er­ship ties put the num­ber of lay­offs at six mil­lion. Both sources re­quested anonymity be­cause they were not au­tho­rized to speak to me­dia about the po­lit­i­cally sen­si­tive sub­ject for fear of spark­ing so­cial un­rest.

The min­istry of in­dus­try did not im­me­di­ately re­spond when asked for com­ment on the re­ports.

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