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China ties SOE employees' salaries to profitability

(Xinhua) Updated: 2015-06-04 09:45

BEIJING - Against the backdrop of waning revenues and profits, the State-owned enterprise (SOE) watchdog on Wednesday said combined salaries must be reduced at central SOEs witnessing declining profits.

In the latest circular issued to centrally-administered SOEs, the State-owned Assets Supervision and Administration Commission (SASAC) called for efforts to boost revenues, slash costs and fulfill this year's operation targets.

Salaries must be strictly tied to company profits, and in SOEs reporting growing profits, salary increases should not surpass that of profits, said the SASAC.

Priority should be given to improving growth quality and efficiency, innovation, opening new markets, and reducing operational costs to register higher combined profits at all SOEs, said the SASAC.

"The global economy is undergoing profound adjustments, and the recovery lacks momentum. The Chinese economy is faced with mounting challenges, and some industries are facing risks of overcapacity, weak demand, low product prices, and high debt levels," it stressed.

Combined business revenues of 112 SOEs directly under the central government's administration stood at 25.1 trillion yuan ($4.1 trillion) in 2014, up 3.8 percent year on year, but the growth rate was its slowest since 2009.

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