China plans to raise the salaries of civil
servants working for the central and local governments and employees of public
institutions as the government begins to reform the country's income
distribution system to narrow the gap between rich and poor.
A total of 34.7 billion yuan (4.3 billion U.S. dollars) will be spent on
salary rises for 120 million people, including six million central and local
government officials, 30 million employees from public institutions, and 50
million retired military servicemen and government employees in 2006.
In addition, the stipend standards for 30 million disabled military
servicemen and family members of war heroes and military servicemen, and the
basic subsistence allowances for urban dwellers, will also be raised.
"It (the salary reforms) will help create a sound environment for the income
distribution system reform of the entire society," said Chinese President Hu
Jintao at a high-level meeting discussing equal income distribution early this
The reform is also necessary for the building of an efficient, transparent
and honest government in accordance with the Civil Servants Law which came into
force in January 2006 and stipulated a uniform salary system for civil servants
across the country, Hu added.
People working in remote, underdeveloped areas will also receive a special
allowance and performance related pay will also be implemented.
Of the six million civil servants and 30 million personnel working in
public-funded organizations across China, 60 percent work in county-level
governments, whose salaries depend mainly on the state of local government
finances. Figures from the Ministry of Personnel show that the income gap ratio
between officials of the same ranks in Shanghai and the northwestern province of
Shaanxi can be 2.8:1.
The aim of the planned pay rise is to improve the welfare of government
employees who work in China's poor and rural regions, according to the Ministry
Except for nine prosperous regions including Beijing, Shanghai, and the
provinces of Shandong, Jiangsu and Fujian, the cost of the salary increases will
be footed by the central government.
"It is very important to offer government administrative staff effective
incentives to inspire more enthusiasm," said Dr. Liu Xin, a professor with the
School of Public Administration at the Beijing-based People's University of
He noted that it was very difficult for grassroots civil servants to secure
pay rises by staying in the same position for years, while their workload and
pressure continues to build up. "It has inevitably led to inefficiency and
turnover of competent civil servants who believe their income should match their
actual contribution," he said.
Statistics from the Ministry of Personnel showed that at least 1,039 civil
servants with bachelor degrees had resigned from 21 central government
ministries between 1998 and 2002. In the Ministry of Foreign Affairs, most of
the officials who resigned were below the age of 35. One hundred and twenty
three people who worked for the Ministry of Commerce for less than three years -
72.8 percent of the total - quit to join foreign companies, where the income
level is based on performance.
The unfair income distribution system has even prompted some officials to
gain personal wealth by unlawful means.
The audit report of 32 central government ministries and national-level
public institutions released last September by the National Audit Office showed
that some organizations had embezzled public funds to pay special allowances to
their employees. For example, a public institution under the General
Administration of Civil Aviation had spent more than 48 million yuan (six
million U.S. dollars) on special allowances for employees.
Xie Zhengzheng, who works in the Beijing branch of a foreign investment bank,
is sceptical of the pay rises for civil servants since "their income is actually
far more than the cash they receive". "It includes various welfare like assigned
apartments and automobiles," he said.
But the Ministry of Personnel insists the emphasis of the reform is to quash
these unofficial bonuses and curb excessively high salaries, while increasing
pay for grassroots officials.
"The income for government officials, which comes mainly
from public funds, should be transparent and balanced, as it sets the tone for
the whole income distribution reform," said Dr. Liu Xin.