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China to Reform the Pay Scale in State Owned Enterprises

Qiu Xiaoping, vice minister of the Ministry of Human Resources and Social Security, disclosed that a reform will take place in managing the pay scale in state owned enterprises. Tighter control will be exercised over high-income professions.

Qiu stated that the Ministry needs to establish a reasonable control over income allocation and set up a minimum wage standard and rate of increase for wages. The Ministry also needs to build an infrastructure system to conduct pay scale research and information sharing while building a pay scale database for companies to use as a reference.

According to statistics, from 2002 to 2011, the average salary in urban regions grew 14.63 percent from 12,422 yuan (US $1,990) to 42,452 yuan (US $6,802). Farm workers have become the main workforce reaching 252 million in 2011. It was also disclosed that certain high ranking managers in state owned enterprises make a million or even a billion yuan in annual salary. It was suggested that their income shouldn’t be higher than three times the salary of those in a public servant position ranked at the same level.

Source: People’s Daily, October 31, 2012