More than two million workers in China's industrial sector lost their jobs in the first half of this year as the result of streamlining and delays in construction and investment projects, a report said yesterday. By the end of June, the total industrial workforce stood at 146.9 million, down 2.17 million from the end of 1995, the Business Weekly reported. State-owned enterprises accounted for 1.14 million layoffs, while the collectively owned business sector cut 802,000 workers. 'Such industrial sectors as manufacturing, mining and drilling, as well as construction were among the hardest hit by the sharp downturn in the workforce,' the newspaper quoted Zhang Jinsheng, a senior researcher at the Ministry of Labour as saying. Ministry figures show the number of workers in those three industries declined by 639,000, 218,000 and 27,000 respectively during the first six months of the year. Labour sources said the real picture was much bleaker than these figures suggested. They said the government statistics did not include those who were paid partial wages and those who received no pay but had not been formally laid off. Mr Zhang attributed the layoffs to corporate restructuring and delays to construction and investment projects caused by the Government's tight credit policy. Ni Zhifu , a vice-chairman of the National People's Congress who led a labour inspection team to northeast China recently has warned against laying off workers. Speaking recently in Changchun in Jilin province, Mr Ni said enterprises must not lay off workers unless they have worked out settlements with them. He used Jilin as an example and said that almost a quarter of the enterprises there were losing money and more than 800,000 workers were redundant. Despite its socialist name tag, China has not yet established a fully fledged social security system to look after laid-off and retired workers. Xinhua (the New China News Agency) yesterday claimed that two other 'disastrous provinces' - Liaoning and Heilongjiang - had both made headway in reforming their state-owned sectors and creating jobs. It said that 'a number of the large state-owned enterprises and more than 60 per cent of the medium and small enterprises in Heilongjiang' had shown signs of life again. Heilongjiang, Liaoning and Jilin - China's three heavy industry bases - have been plagued by chronic losses and are struggling to regain their leading status in the economy. Officials have admitted that because of the state-owned sector's poor performance, the Government has shelved or delayed other reformprogrammes in order to avoid triggering social unrest.