China steelmaker to cut up to 50,000 jobs

[Anees]

Chinese Premier Li Keqiang said Saturday the central government would allocate 100 billion yuan ($15 billion) over the next two years for a labour resettlement fund.
RELATED ARTICLES

China firm to cut up to 50,000 jobs - Khaleej Times
Mar 12, 2016

China to fire 1.8 million workers in coal, steel sector - Khaleej Times
Feb 29, 2016

It's time to slow down: China - Khaleej Times
Mar 6, 2016

China pledges structural reforms - Khaleej Times
Mar 6, 2016

One of China's largest steelmakers plans to shed up to 50,000 jobs, its chairman said, as the country struggles to reduce overcapacity while growth in the world's second-largest economy slows.

The comments by Ma Guoqiang, the head of state-owned group Wuhan Iron and Steel, are a stark illustration of the challenges facing Beijing as it seeks to retool the economy while avoiding social unrest - anathema to the leadership.

The firm's steel division currently has 80,000 employees but might retain only 30,000 of them, Ma said on the sidelines of the National People's Congress, the country's rubber-stamp parliament.

"Probably 40,000-50,000 people will have to find other ways forward," he told people.com.cn, a news portal run by the Communist Party's mouthpiece the People's Daily, according to a transcript on the website.

China's economy grew at its slowest pace in a quarter of a century last year and its outlook remains bleak, with the government last week lowering its 2016 growth target to 6.5-7 percent, down from "about seven percent" previously.

Authorities have prioritised reducing borrowing, overcapacity and inventory as they seek to maintain growth and make it more sustainable.

The government has announced a goal of cutting steel capacity by up to 150 million tonnes within five years.

But much production is already inactive. Wuhan Iron and Steel is only running at 70 to 75 percent capacity, Ma said.

Global steel prices have plunged in the face of a worldwide glut and both the United States and European Union, whose own steel industries are deeply troubled, accuse China of selling underpriced steel in their markets.

China's minister of human resources and social security in February estimated there would be 1.8 million layoffs due to restructuring in the coal and steel industries, without giving a timescale.

The prospect raises the threat of mass unemployment and the possibility of protests as a result.

To cushion such blows, Chinese Premier Li Keqiang said Saturday the central government would allocate 100 billion yuan ($15 billion) over the next two years for a labour resettlement fund.

Wuhan Iron and Steel grew out of the first large steel plant built in Communist China, which started operations in 1958. According to the World Steel Association it was the country's fifth-largest steelmaker by output in 2014.

Ma did not specify the timeframe of the layoffs.

He said older workers will be allowed to retire early while some others will be offered positions at the firm's non-steel affiliates, and the company will subsidise those who have to seek jobs elsewhere.

China steelmaker to cut up to 50,000 jobs - Khaleej Times

 

[DRDO KALI 10000]

Still I admire china compare to India, had this condition in India not a single manpower would be axed and will be continued to get pay from tax payers money without work that to 300 - 400% then there pvt peers.
China will come back from it and will again lead this world but India ?

 

[seven7seven]

China is transitioning its economy away from bulk industries and into more hi-tech and high value-add manufacturing, so job losses in heavy industries, such as steel, is to be expected. This always happens when developing countries transition into developed economies and the workforce will be absorbed into newly created sectors. Change is always unsettling but China copes with it and manages it better than any other country.

 

[Desertfalcon]

China is transitioning its economy away from bulk industries and into more hi-tech and high value-add manufacturing, so job losses in heavy industries, such as steel, is to be expected. This always happens when developing countries transition into developed economies and the workforce will be absorbed into newly created sectors.

All of which is absolutely true..............unless it is about America, then there are countless threads about how it means doom and gloom and is a sure sign of America's imminent destruction as a world power.

 

[ito]

This is expected. Chinese economy is in trouble. Trouble in economy means job cuts and pay cuts, because employees are often the first causalities. I think this is just a start, more to follow once Chinese government start cutting its expenditure to bring down the deficit.

 

[sweetgrape]

This is expected. Chinese economy is in trouble. Trouble in economy means job cuts and pay cuts, because employees are often the first causalities. I think this is just a start, more to follow once Chinese government start cutting its expenditure to bring down the deficit.

"Economist", mind you tell me what's the follow?

 

[ito]

"Economist", mind you tell me what's the follow?

I did already said what will follow in my previous post.....further slowing of Chinese economy and more job cuts

 

[faithfulguy]

All of which is absolutely true..............unless it is about America, then there are countless threads about how it means doom and gloom and is a sure sign of America's imminent destruction as a world power.

Actually US of A and China are the two countries that you see predictions about collapsing. The media do not predict the collapse of Indian economy or Rupee. I guess that India is too big to fall.

 

[Lonely Hermit]

Actually US of A and China are the two countries that you see predictions about collapsing. The media do not predict the collapse of Indian economy or Rupee. I guess that India is too big to fall.

India did not increase its debt by 4 times in the past 8 years. You think all those ghost cities and excess infrastructure capacity won't have an impact on Chinese economy ?

 

[Desertfalcon]

Actually US of A and China are the two countries that you see predictions about collapsing.

I can't speak for China, but "they" have been predicting the American collapse for as long as I've been alive. Hasn't happened.

 

[xunzi]

India did not increase its debt by 4 times in the past 8 years. You think all those ghost cities and excess infrastructure capacity won't have an impact on Chinese economy ?

People use the debt argument too much without understanding the fundamental basis of it. I repeat, debt is meaningless without knowing the full extent of a country economic prowess. In other words, you can afford to accumulate huge debt if you can afford to make payment + interest for it. Look for the US as an example. Their debt is enormous but it has little effect on them because their economy makes huge profit that they can afford to pay for it. This is why all advance countries have huge debt. They earn more, they have more debts. The reason for India low debt shows you are an underdeveloped third world country. You don't export anything of value to the world except pharmaceutical. Once you start to invest in infrastructure, you will have a skyrocket debts. Though, the world will expect you to export more value to pay for it; otherwise you will always be in a circle of third world problem.

 

[Dungeness]

This is expected. Chinese economy is in trouble. Trouble in economy means job cuts and pay cuts, because employees are often the first causalities. I think this is just a start, more to follow once Chinese government start cutting its expenditure to bring down the deficit.

China created 13 millions jobs last year while India did 600K, so India is not in trouble? Maybe because India doesn't have many jobs to cut to begin with?

 

[ito]

China created 13 millions jobs last year while India did 600K, so India is not in trouble? Maybe because India doesn't have many jobs to cut to begin with?

I don't know what sources you are quoting. If it is Chinese government sources that I will take with a bag of salt. It is simple logic...when GDP growth comes down...the over all Industrial production comes down too (because GDP is the cumulative value of all the products and services sold in an economy)...when Industries are doing not so good, the first thing companies do is to cut costs...the easiest way to cut costs is bring down the head count.

 

[Dungeness]

I don't know what sources you are quoting. If it is Chinese government sources that I will take with a bag of salt. It is simple logic...when GDP growth comes down...the over all Industrial production comes down too (because GDP is the cumulative value of all the products and services sold in an economy)...when Industries are doing not so good, the first thing companies do is to cut costs...the easiest way to cut costs is bring down the head count.

You take a bag of salt or truck load of salt is entirely your business. With 90% of your work force already in so called "Informal sectors", and 17% women job participation rate, of course you don't need job cut anymore. But you are hardly in position to "worry" about China.

Here is an analogy, Apple sales in China is 58 billion, and 1 billion in India last year, and an Indian is really "worried" that Apple sales in China will go down to 57 billion this year.

By the way, those laid off Chinese steel workers would make into middle class in India with their unemployment benefits.

 

[ito]

You take a bag of salt or truck load of salt is entirely your business. With 90% of your work force already in so called "Informal sectors", and 17% women job participation rate, of course you don't need job cut anymore. But you are hardly in position to "worry" about China.

Here is an analogy, Apple sales in China is 58 billion, and 1 billion in India last year, and an Indian is really "worried" that Apple sales in China will go down to 57 billion this year.

Who said I am worried about China? You infer a little bit far. I was explaining the cycle of GDP and employment rates. In economics it is also called Okun's Law.

Okun's Law: Economic Growth And Unemployment | Investopedia

I can't speak for China, but "they" have been predicting the American collapse for as long as I've been alive. Hasn't happened.

The difference between other economics and America's is remarkable for the sole reason that the economy of US is very diversified, hence the chances of US 'collapsing' is low. Some sectors might not do well, but other will 'fill' the gap. However, there are chances that US economy might enter into recession given the gloomy forecasts of World's economy.