Layoffs Loom in China As Growth Slows

▶ The number of protests doubles, and most industries are affected ▶ “Companies have been delaying wages and cutting the workweek”

While most of the world has fixated on the plunging Shanghai and Shenzhen stock exchanges and Beijing’s missteps managing the currency, China’s labor market has become increasingly fragile. As wage arrears and layoffs

and mining has already begun. The coal industry has shed 890,000 jobs since 2013, equal to all the new jobs in coal created “in the stimulusdriven boom since 2007,” writes Ernan Cui, a Beijing-based analyst at China researcher Gavekal Dragonomics, in a Jan. 6 note. The steel industry, also suffering from overcapacity, has dropped 550,000 workers over the same period. “It is not implausible that these two sectors could lay off 1 million workers in 2016,” Cui writes.

Even as the service industry grows, it’s failing to create many higher-end, better-paid jobs, like those in finance. Instead, says Park, it’s generating positions such as waiters, cooks, and dishwashers in restaurants. China Labour Bulletin’s Crothall says, “The jobs that are becoming available in the sector are not necessarily that much better in terms of pay and conditions, as former factory workers were getting. Indeed, they may often get paid less and be working longer hours.” �Dexter Roberts

The bottom line This year is shaping up to be a tough one for Chinese labor, as employers seek to reduce costs and pare away excess capacity.