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:



China, Mongolia give strong boost to win-win cooperation

President Xi’s State Visit to Mongolia
  1. The visit is the first in 11 years by a Chinese head of state to Mongolia
  2. The visit is Present Xi’s second State visit since he took office.
  3. Fruits were reached during President Xi’s state visit to Mongolia, including but not limited to:
  • A joint declaration to upgrade bilateral ties to a comprehensive strategic partnership.
    – The target is to expand two-way trade to $10 billion by 2020
  • speeding up cooperation in
    – rail and road connectivity,
    – mineral resources development, and
    – processing and finance, among many other areas.
  • setting up an economic cooperation zone and a deal on currency swap
  • supporting Mongolia to create a better investment environment
  • helping Mongolia to join the Asia-Pacific Economic Cooperation (APEC) mechanism.
Historical developments of Relationships between the Two Countries
  1.  In 2003, a good-neighborly partnership of mutual trust was established.
  2. In 2011, the ties to a strategic partnership were elevated.
  3. In trade aspect,
    – In 2002, the trade between the two countries was $324 million
    – In 2013, the trade surged to $6 billion.
    – Over the past 10-plus years, China has been Mongolia’s largest trading partner and largest source of foreign investment.
  4. In tourism aspect, over 1 million Mongolians visited China in 2013.
President Xi’s Four-point Proposal for Two Countries
  1.  to enhance political and security cooperation;
  2. to comprehensively expand practical cooperation;
  3. to enhance people-to-people exchanges;
  4. to promote cooperation on international affairs and under multilateral mechanisms.


China Symposium—News Flash                         2014823                          
  1.  这是中国领导人11年来第一次对蒙古国访问。
  2. 这是习近平主席上任以来的第二次国事访问。
  3. 在国事访问期间,两国达成了许多成果,包括但不限于:
  • 联合声明建立全面战略伙伴关系
    – 目标:截至2020年,双边贸易额扩大至100亿美元
  • 速在下列领域的合作
    – 铁路与公路;
    – 矿产资源开发,以及;
    – 加工业和金融以及其他领域。
  • 建立经济合作区和货币互换协议;
  • 支持蒙古国建立更好的投资环境
  • 帮助蒙古国加入亚太经济合作组织。
  1.  2003年,两国建立睦邻互信伙伴关系。
  2. 2011年,两国建立战略伙伴关系。
  3. 在贸易方面,
    – 2002年,两国间的贸易额为3亿2400万美元.
    – 2013年,贸易额升至60亿美元。
    – 在过去的十多年里,中国一直是蒙古国的最大贸易伙伴和最大的外国投资来源国。
  4. 旅游方面,2013年超过100万的蒙古国人民来中国旅游。
  1. 加强防务和安全合作;
  2. 全面扩大务实合作;
  3. 加强人员交流;
  4. 在国际事务和多边机制中加强合作。

Antitrust Investigations in China

No letup in spate of antitrust probes, firms are asked to cooperate

                       —Zhao Yinan and Li Fangfang (China Daily USA 2014-08-07)

 l     A slew of investigations are being or have been conducted in China, with more in the pipelinel     Anti-monopoly investigations into leading companies showed no signs of abating.

l     12 Japanese auto companies have been investigated.

  • The reason for probes: suspected price manipulation of parts and bearings .
  • The process of probes: probes into Chrysler and Audi have been completed.
  • The result of probes:it said these companies will be fined soon.

l     Other investigations, including:

  • raid on Mercedes-Benz’s Shanghai office and its five distributors;
  • a visit to Microsoft China’s financial services provider;
  • seeking evidence of monopoly practices against Microsoft China.

l     Investigations are stepped up and at least 170 employees will be recruited for the antitrust law enforcement team.

Satisfied Conditions for Launching Intensified Antitrust Investigations
l     Regulators have accumulated substantial experience since the Anti-Monopoly Law was introduced.

l     The law had not been enforced well.

l     Regulators now feel more comfortable in dealing with them

Advices for the Foreign Companies
l     Foreign companies should be familiar with China’s law, as it has its own terms.

l     Foreign companies should comply with China’s antitrust laws

l     Foreign companies should be more careful about their code of ethnics

Comments on Probes into Auto Companies
l     Nissan: it had not been investigated

l     Audi China and Mercedes-Benz: they were cooperating with the commission

l     Chrysler, Toyota, Mazda and Honda: no comment

l     Industry experts:Monopolistic practices are rampant in the auto industry.

China Symposium—新闻简报1                             20148月11                          
一系列反垄断调查尚未停止,公司间应彼此合作—Zhao Yinan Li Fangfang (中国日报美国版 2014-08-07)
l     一系列的反垄断调查已经或正在中国进行,更多的是在准备中。

l     对龙头企业的反垄断调查尚无减弱的迹象。

l     12家日本汽车制造公司被进行调查。

  • 调查原因:怀疑对零部件和轴承存在价格操纵行为。
  • 调查进程:对克莱斯勒和奥迪的调查已经完成。
  • 调查结果:这些企业可能即将面临罚款

l     其他反垄断调查行为,包括

  • 对上海奔驰及其五个供应商展开突击调查;
  • 对微软中国的金融服务提供方调查;
  • 寻找微软中国垄断行为的证据。

l     反垄断调查升级,至少需招聘170人扩充反垄断执法队伍。

l     自从《反垄断法》颁布以来,监管部门积累了大量的经验。

l     《反垄断法》执法效果欠佳。

l     监管部门认为现在进行调查更合适。

l     外国公司应当熟悉中国法律,因为其法律条款有别于他国。

l     外国公司应当遵守中国反垄断法律。

l     外国公司应当对于他们所谓的行业规范应当更加小心谨慎。

l     尼桑:尼桑公司尚未被调查。

l     奥迪中国和奔驰::正在配合监管部门接受调查。

l     克莱斯勒、丰田、马自达、本田:未发表评论。

l     行业专家:垄断行为在汽车行业较为严重