Moves are being taken by the Chinese government to claw back salaries following suggestions that staff in state-owned enterprises (SOEs), particularly those in monopoly sectors, were overpaid.

The Ministry of Labor and Social Security and the Ministry of Finance have jointly issued an order to strengthen controls on the salaries paid to SOE employees. Local governments have been instructed to ensure their pay is linked to economic performance.

SOEs, where salaries are more than double last year's local urban average, should be reviewed strictly. And pay at such enterprises that experience a fall in profits should be reduced, according to the order.

Some SOEs are able to make big profits because of their monopoly status. Instead of handing over the excessive profits to the government, they've been paying their staff -- managers and ordinary workers -- very high wages.

Sky-high pay at SOEs, especially those in monopoly sectors, has aroused public anger. Salaries in electricity, petroleum, finance and telecommunications enterprises are hotly debated on the internet.

The Beijing News reported last Friday that public pressure had led to a 20 to 50 percent drop in salaries in the electricity sector this year.

Non-state controlled enterprises should negotiate pay with employees according to company policy, states the circular.

(Xinhua News Agency December 5, 2006)