SOE salaries exceed private by 370%

2013 gap less than 2012; average State staff pay was $19,888

The average annual salaries of employees with the listed arms of centrally administered State-owned enterprises (SOEs) is 3.7 times higher than that of people working for urban private firms in 2013, showing signs of narrowing compared with the figures in 2012, according to a report released on Wednesday, a downward trend which analysts believe may continue this year.

The annual salaries of employees with 284 listed subsidiaries of 117 central SOEs averaged 121,578 yuan ($19,888) in 2013, an increase of 9.2 percent year-on-year, 3.7 times higher than that of employees in urban private firms who earned an average of 32,706 yuan for the past year, according to a report released by Chinese website operator NetEase.

The report reached the conclusion by reading the annual reports of the 284 listed subsidiaries of the 117 central SOEs.

According to last year's report released by NetEase, the average annual salary of employees in central SOEs was 111,357 yuan in 2012, 3.9 times higher than those in private firms.

It is reasonable that salaries in private firms are lower than in central SOEs, which are always large and medium-sized companies in high-tech industries and employ highly educated employees, but it is unjustified if the salaries in central SOEs are more than 2 times higher than those in private firms, the report said.

A new rule released by the Political Bureau of the 18th Communist Party of China Central Committee on August 29 said that there will be maximum limits in salaries for highly paid SOEs executives but did not provide any details of how the maximum limit would be set.

After the release of the new rule, some highly paid SOEs executive salaries will decline sharply and the salary gap between SOEs and private firms could be narrowed in the near future, Zhang Juwei, a research fellow at the Chinese Academy of Social Sciences, told the Global Times on Wednesday.

There are also large salary gaps within SOEs with the salaries of highly paid executives sometimes several times higher than the incomes of their employees, and salaries of basic-level employees in most SOEs are not higher than in private firms, Hua Rui, deputy secretary-general at the China Corporate Culture Institute, told the Global Times on Wednesday.

The average salaries in private firms increased by 13.8 percent year-on-year in 2013 from 28,752 yuan in 2012, 4.6 percentage points higher than the growth of average salaries in central SOEs, according to the NetEase report.

As the labor shortage deteriorates in some labor-intensive industries, the average salary will continue increasing in the ensuing months to narrow the income gap, Zhang said.