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China Is Laying Off Steel Workers Too — Millions Of Them, In Fact

Industrial capacity is not national but global.

If you’re not fast enough at changing the channel after the football game you may be exposed to an unfortunate glimpse at 60 Minutes — a generally hype-based, fact-check lax network TV “news” program of the most heinous faux-authoritative sort.

The five minutes of it that I was subjected to today had their anchor going into a decommissioned Ohio steel mill town. The reporter claimed that the most recent steel plant to go out of business was because of imports of cheap Chinese steel and lamented about how the next era of global economic dominance may not belong to America, with the implication was that it would instead belong to China. I believe he said that 500 or so people were laid off from the plant.

It was enough to make you think that steel production is booming in China and that Chinese steel workers have swallowed American jobs. That couldn’t be farther from the truth. While 500 workers lost their jobs in Ohio, China is in the process of laying off millions — yes, millions — of workers in their heavy industries, mainly focusing on steel and coal. There are ongoing protests in various cities in the industrial northeast of the country that are being virtually liquidated in the transition:

China aims to lay off 5-6 million state workers over the next two to three years as part of efforts to curb industrial overcapacity and pollution, two reliable sources said, Beijing’s boldest retrenchment program in almost two decades.

China’s leadership, obsessed with maintaining stability and making sure redundancies do not lead to unrest, will spend nearly 150 billion yuan ($23 billion) to cover layoffs in just the coal and steel sectors in the next 2-3 years.

The overall figure is likely to rise as closures spread to other industries and even more funding will be required to handle the debt left behind by “zombie” state firms.

Industrial production is now global. The worry is no longer Chinese oversupply, American under-supply, etc . . . but global oversupply. To block oversupply in one country in an artificial attempt to bolster it in another misses the point. We’re all in the same boat. Where something is made will become more and more irrelevant.

On almost the exact same day that the announcement came out of cuts in China’s domestic steel industry came another about a state-owned Chinese steel company buying a giant steel mill in Serbia.

Filed under: China, USA

About the Author:

Wade Shepard is the founder and editor of Vagabond Journey. He has been traveling the world since 1999, through 88 countries. He is the author of the book, Ghost Cities of China, and contributes to Forbes, The Diplomat, the South China Morning Post, and other publications. has written 3393 posts on Vagabond Journey. Contact the author.

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4 comments… add one

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  • Nathan Valentine November 28, 2016, 5:01 pm

    The US steel mill *did* go out of business due to being undercut by mills in China. The fact that the Chinese mills are now laying off doesn’t change the past.

    There are long-term strategic advantages to having industrial capacity within one’s own economic/governmental/cultural zone. At least if you frame the world in terms of nations and states…something 99% of the population does and almost no one in the 1% does. And that actually gets closer to the crux of the matter: “Where something is made will become more and more irrelevant *if you are of the ownership class* and more and more relevant *if you are not*. There are competing class interests here and the post-nation global upper class has all of the advantages.

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    • Wade Shepard November 28, 2016, 5:17 pm

      Hello Nathan,

      When looked at globally, the 99%, as you put it, have NEVER had it better. How does this figure into your class struggle argument?

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  • Vanholio! November 29, 2016, 4:44 pm

    Who the hell is working cheaper than the Chinese!?

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    • Wade Shepard November 29, 2016, 8:48 pm

      There is large degree of wage variation across China, but there is a large movement of Chinese manufacturers taking production to Cambodia, Vietnam, Bangladesh, Pakistan, Georgia, etc.

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