United States President Donald Trump rose to victory with the promise refueling the coal and steel industries, while dialing back the regulations he’s accused of bringing these industries to their knees.
Back in China, government policy is to keep the crosshairs on these industries and eventually decimate them. Even as Trump promised in his address to Congress that “dying industries will come roaring back”, Chinese Minister of Human Resources Yin Weimin was on the other side of the world laying out a plan to cut 500,000 jobs in heavy industries. That comes after the loss of 726,000 jobs from the steel and coal industries in the last year.
In contrast, Trump wants to establish new American pipelines made with American steel and has told coal miners during his campaign he’ll have them “working your asses off.” The optimism coincides with the president’s “America First view” which pulled him through a heated campaign trail.
Now, the American people wait for him to deliver.
On the other side, the Chinese are seeing these industries on their death march, which began last year when the government announced it was going to cut more than 1 million coal and steel jobs in the next few years.
The country is seeking to slash its excess capacity in industries led by inefficient state-owned enterprises, which also take up a disproportionate share of financing from banks—which in turn takes away from private companies. The country is also trying to move away from its traditional dependence on state-run investment in infrastructure.
But the road ahead may be longer than expected.
Chinese firms are “reluctant to shutter idle coal mines and steel mills and write them off,” according to report by Capital Economics. “Policymakers continue to drag their feet on reform due to fears that deep capacity cuts would cause a rise in layoffs and an immediate economic downturn. But unless officials act soon, the economy’s sustainable growth rate could more than halve in the years ahead.”
But this may reflect the challenge of the greater coal industry which some analysts argue is disappearing worldwide.
Can Trump reverse the trends? Only time will tell.