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Wednesday, 2 March 2016
China's Ghost Economy Plans Massive Layoffs
Beijing has prepared a plan to lay off five to six million state workers in the next three years, Reuters reports. According to the media, the authorities are aiming to tackle overcapacity and pollution and have prepared lots of cash to prevent social unrest.
Remember Ghost Cities?
(Curator's Vdeo Note)
China will spend 150 billion yuan ($23 billion) in compensation for laid-off workers in just the coal and steel sectors. The overall job cut could reach 5-6 million workers in sectors facing a supply glut, the media reports, quoting two ‘reliable’ sources close to the Chinese leadership.
The figure will grow according to the report, as more spending will be needed to help other industries. China will also have to pay to handle the debt left behind by ‘zombie’ state companies. These are firms that continue to operate even though they are insolvent or near bankruptcy; some of them continue to pay workers fearing the social impact.
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