China to lay off at least 5 million coal and steel workers by 2019
As part of its efforts to rejuvenate its flagging economy, China has revealed its plans to lay off 5 million to 6 million state workers in the coal and steel industries in the next two to three years.
During a meeting between China's premier Li Keqiang and U.S. Treasury Secretary Jacob Lew in Beijing on Monday, Li pledged to avoid devaluing its currency to boost economy growth.
"China does not intend to devalue the renminbi [yuan] to engage in a trade war," said Chinese Finance Minister Zhu Guangyao.
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Facing global pressure to reassure financial markets, Li told Lew that China will move ahead with its long-term plan to squeeze excess production capacity out of industries where supply exceeds demand, reported AP.
According to Zhu, regulators will start implementing changes on the bloated steel and coal industries first. Both industries employ millions of workers and will be the country's boldest retrenchment effort in 20 years.
These plans are part of the government's effort to replace a worn-out growth model dependent on the trade, investment and heavy industry. The focus will shift to a more self-sustaining expansion that is driven by consumer spending.
The Chinese government will set up a 100 billion yuan ($15 billion) fund to cushion the blow to workers affected by the restructuring and help them find new jobs.
"We believe this fund will play a very important role in this process," Zhu said.
The Associated Press contributed to this report.
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