For the complete modernization of the Chinese metallurgy, it is necessary to leave only one of the three workers

We have written many times about China's plans to cut production. Typically, focusing more on the tonne reduction plan than on employment reduction.

China promises to cut its production capacity by 150 million tons and its employment by half a million people. The number of laid-off workers is impressive. But is that enough? The Chinese steel industry employs a total of 3.627 million people in steel production and rolling mills. At the same time, Japan produces eight times less steel than China, and employment in the sector is 20 times less and reaches 174 thousand. human.

Taking into account the volume of steel production in 2015 and the number of employees in the industry, it was calculated that 4.5 workers are involved in the production of 1,000 tons of steel in China in Brazil 3.3 and in the European Union only 2, although in the USA and Japan the ratio is only 1 , 6. In theory, Europe still has a surplus in employment.

In terms of productivity in China, it is the state-owned giants that are the sources of excess employment, and the private companies that have achieved high productivity. In 2015, the state-owned Baosteel Group produced 35 million tons of steel, which employs 126 thousand people (4.9); Ansteel has a production of 33 million tons with 160 thousand employees (3.6); Wuhan produces 26 million tons and employs 82 thousand people (3.3). On the other hand, in China there are private companies Shagang Group and Rizhao Steel Group, which need 1.1 and 0.9 employees to get 1,000 tons of steel.

If the entire Chinese steel industry even reaches the level of Shagang Steel, which produces 1,000 tons of steel and employs 1.2 workers, as a result of modernization and job cuts, then 64 percent or 2.3 million people will lose jobs in this sector. It is not surprising that local authorities are protecting these jobs, as the state budget pays for the losses of the industry, and a great number of unemployed will fall on the head of local officials.