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China Orders Pay Cuts for SOEs Executives

China SymposiumNews Flash[1]       2 September 2014
China Orders Pay Cuts for SOEs ExecutivesBeijing Xinhua (2014-08-29)
The Current Situation of SOEs
  1. 113 SOEs are directly administered by the country’s central authority.
  2. The public’s complaints on SOEs:
  • Inefficiency
  • monopolies in some sectors
  • unchecked spending
  • corruption
  1. Average annual salary of SOEs’ executives ranged from 600,000 to 700,000 yuan in 2010  and 2011
  2. The income gaps between executives and ordinary employees are huge.
  3. Many top executives at SOEs carry a vice-ministerial that brings the “invisible income”.


 Reform the Payment System for Executives of SOEs
  1. President Xi approved plans to reform the payment system
  2. The reform plans called for:
  • cutting SOE executives’ salaries;
  • setting ceilings on SOE executives’ expense accounts.;
  • placing prohibitions on other privileges.
  • prohibiting spending of public funds for personal purposes
  1. The duties of the SOEs are to make sure:
  • Their salary level is proper;
  • Their salary structure is reasonable;
  • Their salary management is strict;
  • Their salary management is efficiently supervised.
  1. The reform should proceed in light of the basic reality that China is still in the primary stage  of socialism


The Significance of the Reform
  1. It will contribute to establish a modern corporate system.
  2. It will push forward the reform of the income distribution system.
  3. It was part of a reform plan in the SOE sector, which have centered on:
  • bringing in private capital to foster modern governance systems; and
  • developing a mixed-ownership economy.


China Symposium—新闻简报               201492  
中国将缩减国企高管收入Beijing Xinhua (2014-08-29)
  1. 113家国企由中央机构直接管理。
  2. 公众对国企的不满之处:
  • 低效;
  • 部分行业垄断;
  • 支出未经审查;
  • 腐败。

3. 2010和2011年国企高管的年平均收入在60万至70万人民币之间。
4. 高管和普通雇员之间的收入差巨大。
5. 许多国企的高管拥有副部级行政级别,为其带来“隐形收入”。

  1. 习近平批准薪酬支付改革计划
  2. 薪酬改革要求:
  • 缩减国企高管工资;
  • 设置国企高管消费上限;
  • 禁止其他特权优待;
  • 禁止公款私用。
  1. 国企的责任是保证:
  • 其工资支付水平适当;
  • 其工资结构合理;
  • 其工资管理规范;
  • 其工资监管有效。
  1. 改革须依据我国仍然处于社会主义初级阶段的基本国情。


  1. 国企高管薪酬改革将促进建立现代公司制度。
  2. 国企高管薪酬改革将促进收入分配制度改革。
  3. 国企高管薪酬改革是国企改革的一部分,后者的重点在于:
  • 引入民间资本,建立现代治理体制;
  • 发展混合所有制经济。
  1. Source: