Life in the Times of Overcapacity

SCMP: Decline and fall: the broken dreams of a Chinese coal-mining city struggling to address industrial overcapacity

A grim, uncertain future hangs over the 1.7 million residents of Datong in the heart of China’s dusty, windswept coal-mining country about 350km west of Beijing.

...The city is on the front line of the country’s battle to phase out excess industrial capacity, which – along with heavy business taxes, sky-high property inventories and financial risks – is threatening efforts to keep economic growth ticking over this year at a minimum of 6.5 per cent. So far, the mission to trim capacity has been carried out by stealth: there has been no official announcement of lay-offs or a deadline for retrenchment. Instead, salaries have been cut or simply unpaid for months as people look over their shoulders waiting for the axe to fall.

...As with any other local government, it is hard to pin down Datong’s true municipal debt leverage ratio. Mainland media reports suggest it could be as high as 20 billion yuan. In 2015, Datong’s fiscal revenues were 9.2 billion yuan – a 12 per cent year-on-year fall. In another sign of its woes, property investment in Datong plunged by 41.4 per cent last year when the real estate bubble burst as the coal boom evaporated.
“This scenario is playing itself out in many cities in China, particularly northeast and central China [as the commodity boom has ended],” said Scott Kennedy, director of the Washington-based Centre for Strategic and International Studies.

Nothing here is surprising, it has been slowly playing out over the past 5 years. Here's a post from 2014 which mentioned Datong and the coal slowdown.