China plans massive layoffs in coal industry

December 29, 1992|By New York Times News Service

BEIJING -- China has laid off 100,000 coal workers and will lay off hundreds of thousands more in the coming years, as part of a broad effort to modernize its energy industry, an official report said yesterday.

The layoffs suggest that the Communist Party is finally grappling directly with the enormously complex and painful problems of industrial restructuring.

Until now, the government has resisted such layoffs for fear of provoking worker unrest -- the same kind of anxieties and outrage that erupted in Britain in October when the government there proposed laying off 30,000 coal miners.

The Communist Party here sees the problem the same way that the Conservative Party perceives it in Britain: Some mines are not economic to operate at present prices. But the British prime minister, John Major, was forced to scale down his program as a result of public outrage.

The official China Daily said China National Coal Corp., a state-owned conglomerate that employs 3 million people, would close 30 inefficient mines in 1993 alone and lay off 30,000 miners and 70,000 workers in related jobs.

The newspaper said the company planned to reduce the number of its coal workers by 400,000 by the time the current five-year plan ended in 1995. The report added that another major state-run coal company, which it did not identify, also planned "massive layoffs."

The China Daily also said that 100,000 coal workers had already been laid off, although it did not say when that had happened. It said that most had found other kinds of jobs. The government apparently intends to help employees laid off in the future to find jobs in new companies in the service sector.

The Energy Ministry refused to comment yesterday. The coal corporation directed phone calls to Tan Enli, its director of policy research, and he declined to discuss specifics. But he did say that the article in China Daily was premature and should not have been published.

"We'd like to do these things," Mr. Tan said, referring to the prospective layoffs for 1993 and subsequent years. "But first we need approval. In January the company will hold a conference to decide whether to go ahead with these plans."

In China, if a conference is called to debate a topic, that usually means that the aim is to build a consensus and legitimacy for a decision that has already been made.

State-owned corporations like the coal company have been a major headache for China's leaders. While the overall economy is booming at a 12 percent growth rate this year, the main beneficiaries are private and collective enterprises.

Among state firms, which account for about half of industrial output, one-third are earning profits, one-third are in the red and the rest are breaking even. Coal mines have particularly suffered because their costs have gone up while the price of coal is fixed by the state at artificially low prices.

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