Cutting overcapacity is one of the five tasks in China's supply-side reforms, and is considered the most difficult one. Stoping production and closing factories are easy, but how to deal with laid-off workers is a big challenge for both the companies and governments.

In today's "new-norm economy investigation" episode, let's see how Ansteel, one of China's biggest steel producers, cut its overcapacity while making sure its workers are well managed. 

Mr. Xia Gang is 48 years old. In the past 31 years, he spent his entire career at Ansteel. So when his factory closed earlier this year, it was very difficult for him to leave.

"I feel lost --- It's hard to leave here --- I had worked here for 30 years." Xia Gang said.

Xia's factory gradually stopped its production starting this year. The factory used to produce about five million tonnes per year. Shutting down the factory means 34 thousand people will be laid off.

"People all say that it is hard for men over 50 years old and women over 40 years old to find new jobs right now." Xia Gang said.

Both the central and local governments are providing financial support to help the laid off workers to find jobs again. Some worker can stay with Ansteel after competitive selection. The ones who have failed or choose to leave will get subsidies and training from governments.

"From local government, the lay-offs can get about one thousand yuan employment insurance.  we also organize training courses to help them improve their skills in other areas." Feng Xin, deputy director of Panzhihua City Employment Service Network said.

Recently, Xia Gang has found a job in a travel agency. He is looking forward to a new beginning.

"I decided to start over. I like my new job. Most of my other colleagues left the factory have gradually found new jobs as well." Xia Gang said.

China's Finance Ministry gave 100 billion yuan to help companies cut overcapacity in May. In the next five years, steel and coal industries will face the challenge of helping 1.8 million workers to find new jobs. Meanwhile China will also faces the challenge of streamline SOEs' administrative strucuture and ensure local tax incomes while cutting overcapacity.