China’s steel industry committed to cutting overcapacity
China’s steel industry is facing the daunting task of fighting overproduction.
Slower economic growth has made overproduction in China’s steel industry a burdening problem. Premier Li Keqiang has called for greater efforts to deal with it.
Wuhan Iron and Steel is one of the country’s biggest iron producers, and one of the world’s 500 biggest firms.
The director of communications Wuhan Iron and Steel Corporation, Sun Jin said “There have been no layoffs or pay cuts at all. The corporation just wants to optimize labor resources, reduce human resource costs and enhance labor productivity. We still give workers a basic salary and social security. They just work somewhere else”
Too much steel has been produced. As demand shrinks and the glut grows, prices have fallen.
380-kilometers of railway in Wugang’s 21-square-kilometer iron factory are no longer busy carrying piles of steel. Many production lines have closed.
The government says half a million workers in the steel sector are expected to lose their jobs as part of the efforts to cut the overcapacity.
The central government will provide 100 billion yuan for retraining and to help them find new jobs.