GOVERNMENT cadres will receive incremental wage increases under new regulations to be implemented in China next month. The state-run Hong Kong China News Agency (HKCNA) yesterday said the Chinese Civil Servants Interim Regulations promulgated about three weeks ago by the State Council would take effect next month. The new rules would cover the four to five million government cadres in China, and the agency claimed the full implementation would take at least three years. In addition, the new rules will spell out conduct that civil servants should be aware of or avoid. The report said the new regulations were significant because they played a ''fundamental and long-term role'' in the building of a ''clean and honest'' government. But due to the Government's poor financial health, the agency predicted, there would be difficulties in the implementation. Although corruption existed even during the ''revolutionary years'', the report said it was never as serious and widespread as today. The report claimed that after more than a decade of economic reform, people have become more aware of the magic of money and cadres have fallen victim and become corrupt. Since their wages were relatively low compared with ordinary factory workers and the so-called getihus, or private businessmen, government cadres were most vulnerable. They took advantage of their special positions and ''traded power for money'', the agency said. ''Some [government cadres] have become company bosses through their relatives and families. Some were big players in the stock, forex and real estate markets,'' the report said. Some corrupt cadres even ran smuggling and prostitution syndicates and offered protection to drug traffickers. The report said the authorities were aware of the seriousness of the problem and the Communist Party recently issued a ''five-point code of conduct'' to offer a ''legal framework'' to combat corruption. ''But only the establishment of a civil servants system is the long-term cure to the problem of corruption,'' the report said. Analysts pointed out that although the new regulations were dubbed the Chinese Civil Servants Interim Regulations, they only loosely followed Western models. For example, the Chinese Communist Party would continue to enjoy absolute monopoly over the control of the Government, and civil servants who refused to follow party orders would be sacked.