China's workers are starting to feel the pain of the global commodities bust: the Chinese government said Monday it was planning to shed 1.8 million coal and steel jobs in an effort to reduce excess capacity.
Some 1.3 million jobs will be lost in the coal sector, and 500,000 in the steel industry.
The cuts represent about 20% of China's coal and 11% of her steel jobs.
China's slowdown has triggered a rout in global commodities. For years, China pumped up its economy by building infrastructure and factories, fueling huge demand for coal and steel.
But the world's second-largest economy is now posting its weakest growth in 25 years, prompting those industries to cut back on investment and jobs around the globe. Now, the layoffs are also hitting China.
Chinese companies have been accused of selling unwanted steel on world markets for less than it costs to produce and export, suffocating local rivals. A month ago, Europe slapped anti-dumping tariffs on Chinese steel imports in an attempt to save thousands of jobs.
In addition to tackling overcapacity, China's announcement could represent a small step towards reforming its large state-owned companies, which are notorious for inefficiency and wasteful spending.
In a move that could ease the pain of the steel and coal cuts, the Chinese government has earmarked 100 billion yuan ($15.3 billion U.S.) over the next two years for unemployment relief, offering training and job placement services.
