BIZCHINA / Biz Life
Probe into SOE salaries
By Wu Jiao (China Daily)
Updated: 2007-05-15 09:05
The widening income gap among different sectors and regions has prompted
China's State assets watchdog to order a probe into the salary growth of
employees of State-owned enterprises (SOEs).
According to a notice posted on the website of the Assets Supervision and
Administration Commission yesterday, the investigation will mainly cover
the average income level and salary increases of employees with SOEs at
the central, provincial and municipal levels between 2004 and 2006.
A report on income comparisons between SOE employees and local residents
has also been ordered.
The notice also requires an analysis on the low salary increases of some
SOE employees and suggestions on building a "normal salary increase
mechanism" for all SOE employees.
The notice comes at a time when the widening income gap between
industries and regions has drawn strong criticism in China, where the
gini coefficient, the leading measure of inequality, now stands at 0.46,
exceeding the internationally-recognized level of 0.45.
The gap between SOE employees, especially those with monopoly industries,
and employees with non-State sectors has also sparked criticism.
The salaries of SOE employees surpassed those in other sectors for a
number of years between 1990 and 2005.
In 2003, SOE employees were the highest salary earners, according to a
report published by the National Development and Reform Commission (NDRC)
in February.
Meanwhile, the real incomes of people working in the electricity,
telecommunications, finance, insurance, water and tobacco sectors are
five to 10 times higher than those in other industries.
According to Su Hainan, an expert on salary trends with the China
Association for Labor Studies, the reason behind the rocketing salary
increases of SOE employees is that they are in a position of advantage in
the distribution of resources.
To address the issue, the NDRC, the country's top planning body, has in
collaboration with other central government departments, worked out a
plan to push forward the reform of income distribution, but there is no
timetable for its release.
The government has adopted a series of measures to tackle this problem,
like putting more money into the countryside and launching its "go west"
strategy to support the country's western provinces, which lag far behind
the coastal areas.
(For more biz stories, please visit Industry Updates)
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