China to cut five lakh jobs in steel and coal sector to reduce excess production capacity

China said on Wednesday it will cut five lakh jobs from steel, coal and other heavy industries to reduce excess production capacity amid slowdown of the world's second largest economy.

Yin Weimin, minister of human resources and social security, announced plans to relocate five lakh workers who faced job losses this year.

China's urban unemployment rate stood at moderate 4.02% last year which is well within the target range despite the economic slowdown, Yin said.

China makes more than half the world's steel, but due to drop in global demand has left the industry with massive overcapacity. About 13.14 million new jobs have been provided to urban residents last year, Yin said.

He reassured that the figures are accurate as a sampling survey by the National Bureau of Statistics showed similar results, state-run Xinhua news agency reported.

With continued slowdown since 2011, the ruling Chinese Communist Party government is anxious to keep the unemployment at a manageable level to avoid urban unrest.

There are also concerns of job losses specially in steel, and coal sectors as the government is cutting down excessive production.

Yin said the central government spent over 30 billion yuan (4.36 billion dollar) last year relocating about 7.26 lakh employees affected by the country's overcapacity cutting drive.

China will relocate about five lakh employees this year as job losses continued, he said. The 2.3 million-strong Chinese military, which is world's largest is in the process of retrenching three lakh troops announced by President Xi Jinping in 2015.

The world's second largest economy claims to have managed to keep stable employment in recent years by offering jobs to over 13 million urban dwellers each year. China's economy?grew 6.7% year on year in 2016, the slowest pace of growth in 26 years from 6.9% in 2015.

China produces over seven million graduates every year who enters the employment market directly.