State media have started to roll out articles lambasting the luxurious lives of senior executives at state-owned enterprises (SOEs) - a clear indication, observers say, that President Xi Jinping not only plans to cut their perks, but will make them the next target of his anti-graft campaign.
In an article yesterday, Xinhua gave a list of SOE executives and their perks, including extravagant meals, fancy cars and games of golf. Xi had vowed at a meeting on Monday to eliminate these kind of expenses attached to senior positions at SOEs and to cut salaries.
The article said: "Some executives have enjoyed privileges ranging from clothing, meals, homes and travel to recreational activities in the name of job-related expenses."
Zhu Lijia, a professor of public policy at the Chinese Academy of Governance, said SOE executives were generally paid more than government officials. "They are both public servants. Why should one get much higher pay?" he said. "Taking advantage of public resources is also corruption."
China News Service reported yesterday that provincial governments had recently rolled out their own reform plans for SOEs, including specific benchmarks to keep executives' salaries "reasonable".
It noted that public discontent over high salaries at SOEs was mounting, and was directed at the monopolised sectors in particular, where high pay levels were deemed particularly unjustified.
Andy Yao Shaohua, senior economist at Hang Seng Bank, said reform in this area was related to the continuing campaign against corruption. "The major issue is that many officials have spent too much public money in the name of work. Banquets and travelling out of the companies' purses should be strictly limited," he said.
According to Xinhua, the approximate 250 A-share companies linked to the government spent a combined total of 6.5 billion yuan (HK$8.2 billion) on receptions in 2012. And in Shandong province, nearly half of business expenditure by all 32 of the SOE chiefs under the provincial government was spent on vehicles.
A commentary in yesterday's People's Daily by Jin Bei, of the Chinese Academy of Social Sciences, argued that unlike regular companies, where the goal is to maximise profits, SOEs are set up to operate in the public interest, and executives' salaries should be in line with that.