Thursday, December 17, 2015

Similar to Central Appalachia, rural northeastern China struggling with the loss of coal jobs

Coal country in Hegang, China, in Heilongjiang Province—one of the nation's poorest regions—could easily be mistaken for Central Appalachia. Much like areas in West Virginia and Kentucky that are struggling with the loss of coal jobs, rural China is experiencing a similar fate. In September, the Longmay Group, the biggest coal company in northeastern China, announced plans to lay off 100,000 workers, Jane Perlez and Yufan Huang report for The New York Times. "The elimination of about 40 percent of the work force at 42 mines in four cities is the biggest reduction in jobs that anyone could recall in this steadily declining rust belt near the Russian border." Nationally, coal prices have fallen 60 percent since 2011.

"China has managed mass layoffs at creaky, state-owned businesses like Longmay before, averting the threat of strikes and unrest by suppressing protests and offering payouts and job training," reports the Times. "But that was when the economy was booming and could readily absorb displaced workers. The test the government now faces in this depressed coal town and in other hard-hit areas across the country is whether it can head off labor discontent in a slowing economy." (NYT map: Hegang is in Northeastern China)
"Longmay has delayed the bulk of the layoffs, cutting only several hundred older workers who held nonessential jobs," reports the Times. "Last month, the government of Heilongjiang Province, which owns Longmay, announced a $600 million bailout that would help the company repay its bonds. But analysts see the infusion as short-term relief that will not prevent a reckoning."

The downturn in the coal economy is leading to civil unrest, with workers protesting and management responding by locking workers in the mines, reports the Times. Also, "Internet regulators exposed a group of workers discussing a demonstration on an online bulletin board. They were hauled to a police station, fingerprinted and warned that jail sentences would follow if they dared do it again." The number of worker strikes and labor protests in China was 2,354 through November, compared to 1,207 in 2014.

A former coal worker, who quit to find a better paying job, told the Times, “In the 90s, everyone was poor. Now the rich are too rich, and the poor are too poor. Because of the layoffs, everyone is worried. No one has a way to live outside the mines. With the New Year holidays coming, there will be chaos in Hegang.” (Read more)

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