China is considering setting salary caps for top executives at state-owned enterprises, according to a senior political adviser.
"The State-owned Assets Supervision and Administration Commission is working out a plan to limit the maximum annual salary of SOE top management, and the initial standard is likely to be set at no more than 14 times the average salary of ordinary employees," Xu Kuangdi, vice chairman of the 10th National Committee of the Chinese People's Political Consultative Conference, told the Beijing Times newspaper.
Xu, former mayor of Shanghai, made the remarks at a panel discussion during the ongoing annual session of the advisory body in response to complaints from fellow delegates about unfairness in China's wealth distribution.
According to Liu Zhizhong, a senior adviser from southwest China's Chongqing Municipality, the income disparity between employees in the same unit sometimes ranges as high as 30 times.
"The assets commission has taken notice of this problem and is formulating regulations to narrow the salary gap," said Xu.
China's state-owned enterprises make up nearly 50 percent of the country's total industrial fixed assets and receive nearly 60 percent of domestic bank loans each year, but they contribute only about one third of China's annual industrial output value.
Two scandals exposed late last year in which the China Reserve Cotton Management Corp and China Aviation Oil lost more than US$600 million due to poor management and market speculation stirred up widespread public criticism about overpaid yet incompetent and irresponsible SOE executives.
In his government work report delivered at the opening of the annual session of China's legislature, the National People's Congress, Saturday, Premier Wen Jiabao pledged that his Cabinet would continue to "deepen the reform of state-owned enterprises" as "the central link in economic restructuring."
"We shall institute a system for annually assigning accountability for enterprise performance and a system for holding enterprise executives responsible for their work during their terms of service," said Wen.
"We will standardize the system of benefit packages for these executives."
Established in March 2003 as the supreme watchdog over state assets, the commission and its branches supervise the management of 150,000 SOEs with total assets worth more than 11 trillion yuan (US$1.32 trillion).
(Xinhua)