China’s war on emissions has badly hit the country’s polluting steel belt, adding pressure on job creation, which is required to absorb millions that are entering the employment market.
Outdated steel mills in China’s Hebei province are being shuttered as the focus sharpens on pollution control, triggered by public demand for cleaner air.
Hebei — the province next to Beijing — which produces a quarter of China’s steel, and is a major generator of jobs, is paying a “huge price” for the anti-pollution campaign, says a top local Communist Party official. "In order to solve the problems of industrial restructuring and pollution, Hebei has made huge efforts and paid a huge price," said Zhou Benshun, the provincial Party secretary, on the sidelines of the annual session of the National People’s Congress (NPC) — China’s parliament.
The official was referring to the closing of polluting coal based steel factories, which had led to a 0.6 per cent production drop last year. A nationwide decline in steel demand, resulting from an economic slowdown, which has hit the steel-consuming construction sector especially hard, had also led to the fall in output
With steel at the heart of Hebei’s economy, provincial growth rate slipped to 6.5 per cent, far below the 8 per cent target.
Authorities in Beijing are well aware of the growth versus emission equation, and the multiple problems that it is creating in Hebei, including job losses. State media quoted Prime Minister Li Keqiang, after his meeting with a Hebei delegation that the province’s “easing of steel overcapacity needs state help and we need to offer some preferential policies in aspects such as financing".
While committed to meet clean air targets, China’s planners are concerned about jobs, to insure that the social premium that they have to pay to get the economy reignited is minimum.
Xinhua is quoting Yin Weimin, the human resources and social security minister as saying that around 15 million young students need to find jobs in 2015. The daunting statistic consists of 7.49 million college graduates and a similar number of those who are passing out from vocational and technical schools. Besides, a three million strong labour force from the rural areas would be migrating to towns and cities in search of employment.
According to a government work report, China is aiming to create more than 10 million urban jobs, to ensure that registered urban unemployment rate do not rise above 4.5 percent in 2015. After decades of hyperactive growth, China plans to grow at around a sustainable 7 per cent rate, which some economists are saying could be the trend for another 20 years.
Many government advisers are pointing out that a more active role for market forces and rapid, innovation based, expansion of private enterprise should be at the heart of railing the economy on more efficient lines.
Qian Yingyi, dean of the School of Economics and Management at Tsinghua University, warned a state political advisory body on Monday not to over depend on monetary policy to revive the economy.
On the contrary he advised the government to streamline administration, accelerate reform of the taxation system, revamp state-owned enterprises, and encourage innovation and entrepreneurship. "It is like when a man is sick, aside from the medicines, his own body's self-adjustments are also vital," Xinhua quoted Mr. Qian, as saying.
