The topic of salaries is something that almost everyone likes to talk about, especially over the last 12 months when urban Chinese have been riding a salary wave.

The latest report on salaries for 2004 showed that urban pay scales continued to rise over the past year and the rises average about 6.7 percent.

The result came out after a Chinese job hunting website (www.zhaopin.com) analyzed data from more than 2 million resumes in its on-line data bank.

The majority of the surveyed are older than 22 and younger than 40 with a bachelor degree.

Shenzhen in south China's Guangdong Province is still No. 1 on the list with average monthly salaries of 4,109 yuan (US$497), Beijing is second at 3,764 yuan (US$455) and then Shanghai's 3,650 yuan (US$441).

Beijing's average monthly salaries have grown 11 percent from last year, exceeding Shanghai for the first time in the recent years.

SOEs vs foreign firms

This is the good news for State-owned enterprise (SOE) employees as their salary hikes, for the first time, surpassed foreign enterprises. Still, actual income is still fall behind their counterparts in foreign and private enterprises.

Compared with last year, monthly salaries at SOEs have grown by 19 percent, 3 percent higher than foreign enterprises. Government organs have seen the smallest rise, only 3 percent.

The reform of the salary system in SOEs has lead to the change, said Xu Yue, secretary-general of the Human Resource Association for Chinese and Foreign Enterprises, Beijing.

As SOEs have gradually revoked their old packages including housing, salaries steadily increased. That is likely to continue, albeit slowly, in coming years, he said.

"They will continue to rise until they meet the bench mark in the market," said Xu.

Human resource experts also noted that it has become more and more popular to give good returns to employees who shoulder management responsibility so the hikes mainly come from the income rise of management.

Gap between staff

Salaries are skyrocketing for experienced managerial professionals while numerous new entrants are seeing declining pay.

Supervisor-level monthly salaries reached 7,647 yuan (US$925), 10 percent up than the previous year. By comparison, new graduates only earned 1,591 yuan (US$192), an average of 54 yuan (US$6) less than last year.

Xu Yue acknowledged that the market demand will continue to drive salaries.

"Salary varies dramatically with experience," he said, adding that Chinese recruitment market is facing a shortage of senior local management professionals to meet the rapid growth of various industries.

University qualifications alone are not an automatic pass into this lucrative market as too many employable university graduates flocked to major cities to compete the few entry-level positions available in the marketplace, he said.

In the past, many foreign firms that established operations in China relied on their own mid- and high-level expatriate managers to oversee their operations, he said. But now they would like to have qualified mid-or high-level local candidates.

While salaries for local Chinese workers at foreign-invested enterprises generally run higher than the average for Chinese-run or state-owned firms, the overall cost of these workers remains far less than their foreign counterparts.

"Increased localization of staff is the current trend among foreign enterprises in China," Xu said.

However, there is more to life and career development than just remuneration, said Xu.

"Salary is not the everything. In general, you find people want more skill development and opportunity," said Xu.

Bai Wenjie, director of Human Resources of IBM China said helping employees justify their jobs by adding value to the company is also very important.

Besides salary, the company's reputation, environment and culture are also a way to attract, retain and motivate the professionals.

"Considered the current market, I am willing to take a lower salary to take a job that offers a chance to learn new skills and advancement possibilities," said Liu Qian, a university senior major in computers.

"For those new hands, losing a little compensation is often a small price to pay for long-term career benefits and they can't pin hopes too high," said Xiong Xibei, a university English teacher.

(China Daily December 16, 2004)