With an eye on curbing industrial overcapacity and pollution, China is planning to lay off state workers—millions of them. The Daily Times reports 1.8 million workers, or 15% of the workforce, will be laid off in the coal and steel industries. However, two sources with ties to the country's leadership tell Reuters the figure could reach up to 6 million across seven sectors, including cement, glassmaking, and shipbuilding, over the next two to three years. Reuters calls it "Beijing's boldest retrenchment program in almost two decades." Some 37 million people were employed by the state in 2013. "It's difficult to predict a time frame," a researcher says of the coal and steel layoffs. "There are many issues to be dealt with, including how to pay debt as well as layoffs."
The government has set aside $23 million to cover the coal and steel layoffs—another $7 million will help workers relocate over three years—but millions more will be needed for other industries. Funding will also be needed to cover the debt left by so-called "zombie" state firms that have essentially closed but keep paying employees in areas where local officials fear bankruptcies and unemployment. Back in December, China's Premier Li Keqiang promised zombie firms would "go under the knife." Business Insider Australia reports "activity levels at Chinese manufacturing firms contracted at the fastest pace seen since November 2011 last month, adding to concerns that growth in the world’s second largest economy is continuing to slow." (Read more China stories.)