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
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
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