CRI听力:China to Allocate 100 Bln Yuan for Job Losses

Cutting overcapacity has been listed as one of the five major tasks in China's supply-side structural reform.

The focus has been placed on advancing economic restructuring by reducing the number of ineffective companies and boosting productivity in the more successful ones. A key measure is the removal of what are called Zombie Companies - these are businesses which have ceased operations but have not formally gone bankrupt.

A key concern for planners has been the fate of workers who lose their jobs as a result of the restructuring.

Addressing the problem, the Government has now announced it's putting aside 100 billion yuan, or some 15.3 billion US dollars, to help relocate, transfer and train workers who are affected.

Speaking at the news conference on Thursday, Miao Wei, the Minister of Industry and Information Technology, gave further details of the plan.

"We are now working with the National Development and Reform Commission, to carry out a concrete implementation scheme to deal with the 'zombie companies'. We aim to hasten the exit of inefficient capacity in conformity with legal provisions. The enterprises that meet the requirements are encouraged to enter into trans-regional or cross-industry acquisitions and reorganizations. We will also stop approving any new projects in sectors with huge overcapacity."

Feng Fei, vice minister of Industry and Information Technology, also emphasised that the so called "zombie" companies must be shut down.

"Local governments should stop granting credits to zombie companies, and banks also should make a distinction and stop giving credits to such companies. It's then necessary to strengthen the enforcement of laws on environmental protection, energy efficiency, quality control, safety and technology, and force the zombie companies to speed up their exit, abiding by laws and regulations."

Fang added there should also be economic incentives to encourage enterprises to merge and regroup, and overcome some of the barriers that hinder regrouping, so as to create a better market environment.

Feng Fei also highlighted that priority should be given to workers affected in the process, who may be laid off or have to be relocated.

"The central government has decided to set up a specialized subsidy for restructuring industrial enterprises. The subsidy of 100 billion yuan over two years is aimed at solving the problems of employee relocation, job transfer, and skill training."

The government has stepped up efforts to slash capacity in certain saturated sectors, especially steel and coal.

Over the past four years, 91 million tonnes of outdated capacity in the iron industry and some 95 million tonnes in the steel industry have been eliminated.

For CRI, this is Huang Shan.