Almost 2m Chinese coal and steel workers will lose their jobs because of government policies to cut overcapacity, according to the minister of human…

Almost 2m Chinese coal and steel workers will lose their jobs because of government policies to cut overcapacity, according to the minister of human resources, highlighting looming woes for China’s workforce

As fears grow over the true extent of the country’s economic slowdown, laid-off workers in traditionally stable sectors are being forced to compete for jobs with about 15m people entering the labour force each year — threatening mass unemployment, strikes and social unrest

Speaking to the media yesterday, Yin Weimin said 1.3m coal workers and 500,000 steel workers could expect to lose their jobs. The majority are likely to be in state-owned enterprises

The minister said the government would put in place “adequate measures” to limit labour market disruption. These included a Rmb100bn ($15bn) fund to help resettle laid-off workers; more flexible retirement procedures within companies; retraining for workers; and encouraging companies to resettle workers internally

Last year China’s steel industry, which accounts for more than half of global production, reduced output for the first time since 1981. The government has set a target of cutting 150m tonnes of production in the five-year plan to 2020

Wang Guoqing, director of research at Lange Steel Information Research Centre in Beijing, estimated that one in 10 steel workers faced being laid off. She added that solid statistics were hard to come by after the government stopped reporting steel employment figures at the end of 2013

Last month China International Capital Corporation, an investment bank, estimated that three in 10 jobs would be lost across all overcapacity sectors — roughly 3m in total. These sectors included cement, glass and shipbuilding, as well as steel and coal

The problem of job cuts was also raised by officials at the China Iron and Steel Association’s national council meeting last month. Li Xinchuang, head of the China Metallurgical Industry Planning and Research Institute, told China Economic Weekly last month that steel capacity cuts would mean 400,000-500,000 displaced workers

At the same time as sustaining heavy job losses, Mr Yin said the Chinese economy would see an influx of 15m young people entering the job market this year, an increase from previous years

Growing strains in China’s workforce have already led to an increase in strikes and “workplace incidents”, according to the China Labour Bulletin, a Hong Kong-based labour rights group, which recorded 503 incidents in January, almost double the 272 in the same month last year

“It is a social issue,” said Ms Wang. “It will affect people’s sense of security. Our country is a socialist country; it must secure the livelihoods of its workers.”

One Shanghai manager, when asked whether local migrant workers were worried about employment instability, said: “Mostly they just worry about making it until the next Spring Festival.”