Chinese President Xi Jinping is about to tell millions of government workers: “You’re fired.”
Reuters reported last week that China plans to lay off between five and six million state workers over the next two to three years, in an effort to curb overcapacity in what’s being described as “zombie companies”: those that are being kept alive on bank loans despite bleeding revenue. Close to two million of these layoffs will come from the coal industry alone.
The layoffs are part of a series of sweeping reforms that were announced ahead of the National People’s Congress (NPC) meeting. Every year, close to 3,000 Chinese officials and executives from all over the country convene in Beijing to develop and assess the status of the country’s Five-Year Plan. In response to worldwide demands that China manage its slowing economy better, President Xi Jinping this year has proposed what he calls “supply-side structural reform.”
And if that sounds a little like Reaganomics, that’s kind of the point.
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