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New economy to mitigate capacity, cut redundancies: Premier

Updated: Jun 28,2016 1:13 PM     Xinhua

The development of new business models in China will help with re-employment of steel workers and coal miners made redundant in the country’s trimming of overcapacity in those sectors, according to Premier Li Keqiang.

“The new economy and new business models are creating more jobs than we expected,” said Premier Li, while meeting with business leaders during the Annual Meeting of the New Champions 2016 in Tianjin, also known as Summer Davos, on June 28.

The Chinese government has been encouraging business startups, especially in technology, and has welcomed development of the sharing economy. There is also a drive to promote tourism in rural areas.

China is planning to cut 100 million to 150 million ton of steel capacity and 800 million ton of coal capacity in a few years, Premier Li said.

“The reduction will involve nearly 2 million people,” according to the Premier.

The central government has earmarked 100 billion yuan (about $15 billion) to help laid-off workers. It has asked local governments to provide funding as well.

Premier Li vowed to cut excess capacity in “a market-oriented and lawful” manner, instead of using administrative orders.