June 20, 2018 / 10:59 AM / 6 months ago

China spends $3.4 billion to resettle steel, coal workers in 2017

FILE PHOTO: A worker shovels coal at a freight yard in Hefei, Anhui province, January 13, 2013. REUTERS/Stringer/File Photo

SHANGHAI (Reuters) - China spent 22.2 billion yuan ($3.43 billion) last year on resettling 377,000 workers laid off as a result of a state campaign to cut capacity in the steel and coal sectors, the finance minister told the country’s parliament on Wednesday.

China said in 2016 it would shed 100-150 million tonnes of annual crude steel production and 500 million tonnes of coal capacity in three to five years as it tried to tackle price-sapping supply gluts in the two sectors.

To allay unemployment fears, China also made a $15 billion special fund available to cover the costs of finding new jobs for the estimated 1.8 million workers set to be laid off during the retrenchment.

“With the timely allocation of 22.2 billion yuan in dedicated funds, capacity cut targets for the steel and coal sectors were exceeded in 2017,” China’s finance minister Liu Kun told the standing committee of the National People’s Congress on Wednesday.

Liu said funding efforts to help large state-owned firms close “zombie” subsidiaries, and ditch costly social obligations such as education and health, had also helped cut average debt ratios by 0.6 percentage points over the year.

In 2016, the first year of the campaign, China shed 65 million tonnes of steel capacity and 290 million tonnes of coal capacity, though the finance minister did not say in last year’s spending report how much money was allocated to resettle the 726,000 workers laid off during the year.

Liu also told parliament that the budget to finance China’s war against air pollution rose 43 percent year on year in 2017. He did not give an absolute figure.

Reporting by David Stanway, editing by David Evans

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