Beijing tightens controls on pay rates as salaries soar and public unrest over inequities intensifies The central government has launched a nationwide crackdown on overpaid staff in state monopolies, further restricting wage increases for workers whose average salary is double the local norm. State-owned companies paying workers twice as much as the average local urban wage last year increase pay by no more than 0.6 per cent for each percentage point in profit growth, according to a circular issued by the Ministry of Labor and Social Security and the Ministry of Finance. The limit was previously 0.75 per cent, Xinhua reported. The circular, posted on the ministries' websites yesterday, said the campaign was aimed at preventing pay rises from outpacing corporate profits. The central government would investigate the implementation of the central directive by those giant state-owned enterprises whose staff salaries are double local levels, the circular said. The campaign will mainly focus on giant enterprises in the banking and finance, electricity, telecommunications, tobacco, coal and petrochemical industries. It warned that officials and executives would face tough disciplinary action if they defied the ruling. It demanded state firms directly under the central government and firms in monopoly sectors such as railways, water resources, aviation, tobacco, postal services and telecommunications submit reports on staff salaries to the labour ministry for review. The central government is increasingly concerned about the growing income gap. The Communist Party's Central Committee last month ended its annual plenum with a resolution calling for accelerated reform of income distribution. The party pledged to speed up changes in monopoly industries and to strictly control salary increases in the massive state monopolies. Beijing recently introduced a payment system for state-owned firms that links staff salary rises to profit growth. The conditions did not apply to non-state firms or publicly listed companies, the circular said. Growth of profits in monopolised industries has outpaced firms in other competitive industries. As a result, state monopolies are paying workers several times the going rate in other industries. There have been calls for the government to speed up the draft of an anti-monopoly law, but disputes among government departments and business sectors have delayed the legislation. Complaints about the 'super profits' made by state monopolies are growing, flooding chat-rooms and filling newspaper pages devoted to readers' letters. The complaints range from issues such as the two-way charges imposed on users by China's only two mobile carriers, to state banks levying consultation fees for information requests and prices increases in public utilities like electricity, water supply, oils and public transport. According to media reports, the annual income of a mid-level manager in a petroleum company is 250,000-350,000 yuan, while a driver or other junior staff member at other state monopolies are paid about 100,000 yuan, both several times than that earned by their equivalents in other public services or the private sector. By comparison, the average urban Chinese worker earns 18,405 yuan a year, according to the National Bureau of Statistics. In a bid to calm a nationwide furore over pay levels, China Construction Bank, one of the big four state banks, recently retracted a decision to allow staff to be awarded salary increases of more than 30 per cent this year. The move followed a public outcry over why the bank's employees were getting a pay rise when taxpayers were left footing the bill for non-performing bank loans.