Laidoff coal and steel miners are to be assisted by the Chinese government. (Photo : Getty Images)
China revealed its plans to assist the now-unemployed coal and steel miners who were laidoff during Beijing's strike at the country's "zombie firms" that had contributed to their debt dilemma.
According to The Wall Street Journal, China's assistance program for those affected by the layoffs as announced by seven Chinese ministries include early retirement, career counseling, and assistance in launching a businesses of their own.
They would also be offered retraining which would make them viable workers for other industries.
"Proper placement of workers is the key to working to resolve excess capacity," the guidelines issued on April 7 stated. "It affects the smooth implementation of supply-side structural reforms, and it affects the direct interests of workers and the overall stability of reform and development."
China's Unemployment Rate
Unemployment has long been an issue that plagued the country. In fact, according to the National Bureau of Economic Research, the country's official unemployment statistics have greatly understated the actual problem.
"China's real unemployment rate is much higher than the official rate and, when correctly measured, is much closer to that in other nations at similar levels of development," the site explained, citing the study "Long Run Trends in Unemployment and Labor Force Participation in China."
According to the research which covered unemployment between 2002 and 2009, the country's unemployment rate has not fully recovered from the massive layoffs during the 1990s and 2000s when the nation transitioned to privatization from a government-controlled economy.
"We find that, by approximately 2002, the unemployment in China was actually higher than that of high income countries, exactly the opposite of what is implied by the official series," the study's authors Yingyao Hu, Shuaizhang Feng, and Robert Moffitt stated.
Now, it seems that the country's unemployment rate would become higher as the country rolls out its Five-Year Plan to combat economic hindrances by eradicating the so-called "zombie firms."
China's Five-Year Plan
In order to maintain its growth pace, China has decided to make sacrifices as the country's deficit in funds, which has affected the economy as well as the nation's downgraded credit standing, has already impacted investments to the country, Reuters reported in March.
Part of the plan was to balance growth with the restructuring of underperforming industries like coal and steel, which are believed to be dragging the country deeper into the debt crisis.
Two sources from Beijing told Reuters that China is planning to let go of a total of 5 million to 6 million state workers for the next two to three years and would spend almost 150 billion yuan or $23 billion to cover the effects of layoffs.
