zerohedge.com / by Tyler Durden / Mar 1, 2017 9:51 AM
With China actively engaged in trimming overcapacity among some of its legacy industries, a familiar and troubling problem has re-emerged, one we discussed extensively in late 2015 and early 2016 – China needs to find a way to transplant unnecessary workers in legacy, “dirty”industries to new jobs in new sectors. Overnight we got a reminder of just this dilemma faced by Beijing, when China’s labor minister said on Wednesday China needs to reallocate half a million steel and coal workers in 2017 due to capacity cuts in these industries as the world’s second-largest economy tries to combat excess in the bloated industries.
“This year we will continue to cut capacity in coal and steel,” Yin Weimin, the head of China’s Ministry of Human Resources and Social Security, told reporters. “We will need to reallocate jobs to 500,000 workers,” he said, including assigning workers different jobs within the same or a different company, early retirement or encouraging them to become entrepreneurs.
Weimin added that China will introduce a policy this year to encourage the development of new industries, for example internet-related industries, that will create new jobs, he said. In 2016, he said that China reallocated jobs to 726,000 coal and steel workers “without any major problems”, adding that China’s overall employment outlook in 2017 is expected to remain relatively stable, despite the government facing immense pressure to create jobs.
What he did not say is that as we reported last May, China’s part-time workers have been soaring as the reallocation process has accelerated.