Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, according to sources familiar with the matter, China is about to set up an annual salary cap of RMB 1 million yuan (around US$ 139,144) for the employees of central-government-owned financial companies.
The salary cap for 27 such financial companies will be realized mainly by cutting bonuses. Salaries of high-level managers who have exceeded the new standard may be halved. The affected financial companies include three major policy banks, five major state-owned commercial banks, six major insurance companies and four non-performing asset management companies. Subsidiaries of these companies will also have a pay ceiling of RMB 3 million yuan (around USD 417,432). Salary reductions and limits may make it difficult for these financial companies to retain top talent, as private financial institutions may provide more competitive salaries.
The move by Beijing follows another recent salary reduction of 50 percent affecting employees of the three major government financial regulatory agencies, namely the People’s Bank of China, the State Administration of Finance and Administration of China, and the China Securities Regulatory Commission.
Source: Lianhe Zaobao, January 22, 2025
https://www.zaobao.com.sg/finance/china/story20250122-5774430