CHINA-INTERNAL: GOVERNMENT (SoE) REFORM
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More details of the decision taken by the CCP’s Leading Group for Financial and Economic Affairs on August 18, indicate that officials in charge of China's State-owned Enterprises (SoEs) face pay cuts of up to 50 per cent and new job descriptions. Xi Jinping also approved a seven-year overhaul of the management structure of SoEs. Intended to address public discontent, the reform is to be implemented in two steps. The first is to cut the salaries of top executives at major SOEs, particularly those in finance and banking. Top SoE executives are often ranked equivalent to Vice Ministers or Ministers with attendant perks and privileges, but are paid like top Western business executives. The head of a central enterprise in the Energy sector, for example, could earn one million yuan (HK$1.26 million) a year. Jiang Jianqing, Chairman of the Industrial and Commercial Bank of China, was paid nearly two million yuan in 2013. The second step is to gradually change their job responsibilities. Government-appointed officials will probably join the board of directors while day-to-day operations will be handled by senior managers recruited from outside, with salaries in line with international standards.
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