SOE executives earn twenty times more than workers, one hundred times more than farmers

11 January 2010
The average salary for senior executives at China’s state-owned enterprises (SOEs) has risen to around 600,000 yuan a year, according to the State-owned Assets Supervision and Administration Commission (SASAC).

SASAC director, Li Rongrong, stated that a large proportion of the executives’ salaries was performance related, and was, in his opinion, “not too high.” Executive salaries have nearly doubled over the last five years, and now stand at about 20 times the average SOE employee’s salary of 31,500 yuan a year, according to the 2009 China Labour Statistical Yearbook. This figure however includes the salaries of senior management, and as such the average workers’ salary should be below 30,000 yuan.

One of the most frequently voiced grievances of SOE workers in the last few years has been the growing disparity between the salaries of workers and management. At Tonghua Steel, for example, workers earned on average 36,000 yuan a year and middle management about 100,000 yuan, while Chen Guojun, the senior manager killed in a riot at the plant on 24 July last year, reportedly earned nearly three million yuan a year.

Moreover, the average wages for SOE workers are usually higher than in the private sector, and significantly higher than for migrant workers, many of whom lost their jobs or suffered a major pay cut last year. Given the economic downturn in the first half of the year, migrant workers in export-orientated industries would have been lucky to earn 20,000 yuan in 2009.

That figure is however still four times higher than for the farmers who stayed at home on the land and did not go to the cities to search for work. China’s Central Conference on Rural Work announced in December that farmers’ average annual income had increased year on year by six percent to reach 5,000 yuan in 2009, or less than one percent of an SOE executives’ annual income.

Although there are huge variations in the wage levels of all sectors and geographic regions, the average figures do give a clear indication of the ever-widening gap between the rich and poor in China.
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