Employment Without Dismissal? Navigating Workforce Resettlement During China’s Coal Sector Transition

• In Event: Transition Toward Decarbonization: Cross-National Perspectives on Transformative and Collaborative Policy Approaches

Abstract

Socio-political trade-offs abound in China’s coal transition toward decarbonization. Addressing the expected large workforce reductions in fossil fuel sectors raise questions about long-term fiscal sustainability, labor rights, reemployment quality, governance capacity, and by extension, the long-run viability of such labor transitions. This paper examines how state-owned enterprises (SOEs) in China’s coal sector managed large-scale workforce reductions during the recent period of coal supply-side restructuring beginning in 2013 without resorting to the mass layoffs that characterized earlier SOE reform eras.

Based on original data from 16 major coal SOEs, we analyze how non-layoff strategies were adopted across varied organizational and local contexts using qualitative comparative analysis (QCA) and in-depth case studies. Our findings on organizational, regional, and policy factors reveal a shift in China’s state-sector labor policy. While mass layoffs in the 1990s were previously viewed as an inevitable cost of market reform, recent efforts emphasize employment preservation—reflecting broader policy priorities centered on social stability. Through coordination between local governments and enterprises, displaced workers were often reassigned into low-need positions or reemployment service companies as semi-formal intermediaries to preserve employment status and avoid public unrest. The study offers lessons for countries managing fossil fuel phase-downs: managing employment disruption is a technical challenge and a political balancing act requiring institutional safeguards, regulatory clarity and policy adaptability. 

Authors

• QUAN ZOU, University of California San Diego
  Presenting Author

• Michael R Davidson, Harvard University
  Non-Presenting Co-Author