Regulators warned Pingmei Shenma some health and education facilities would be shut down if they were not economically viable.
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China has ordered state firms to smash the decades-old system of providing cradle-to-grave welfare support, known as the country's "iron rice bowl".While state firms in wealthier regions of the country moved away from paying for social welfare services some years ago, poorer provinces and especially one-company towns like Pingdingshan struggled to make the switch given the central role their SOE played.China's central government-administered SOEs run around 8,000 units providing community services, and the efforts to ditch them could also increase a firm's redundancy and labor redeployment costs, especially as authorities try to limit unrest in regions already hit by an economic downturn.They spend 850 billion yuan a year on schools, pensions and other "social functions". In Henan, state firms spend 800 million yuan a year just to supply residents with heating, water and electricity.That compared with annual running costs of 300 million yuan.Now, around 500 miners turn up at the pit on a reduced wage of just 410 yuan ($60.52) a month while the company tries to find jobs for them at other state mines.
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