Beijing plans to lay off 5-6 million workers in overcapacity sectors, sources say

Beijing is planning to lay off 5-6 million state employees in industries suffering from overcapacity during the next 2-3 years and will spend RMB150 billion (US$23 billion) to cover layoffs in the coal and steel sectors alone during that period, Reuters reported, citing unnamed sources. The layoffs would be the most significant since restructuring of state-owned enterprises beginning in 1998 ultimately cut 28 million positions and cost the government around RMB73.1 billion (US$11.2 billion) in resettlement funds. The state sector still employed around 37 million people in 2013 and accounts for around 40% of national industrial output. For more on the state’s presence in the Chinese economy, see CER’s in-depth report.