China is set to slash pay for staff at its top three financial regulators, including the central bank, by about half, as part of a regulatory revamp unveiled in 2023 to bring their salaries in line with other civil servants, sources said.
Starting from this month, staff at the People's Bank of China (PBOC), National Financial Regulatory Administration (NFRA) and China Securities Regulatory Commission (CSRC) will see total income slashed by about half, said four sources.
The sources, who have knowledge of the matter, declined to be identified due to the sensitivity of the matter.
The hefty pay cuts would come against the backdrop of China's current focus on boosting consumption, including spending by millions of civil servants, as part of its efforts to maintain a stable growth rate in 2025.
The cuts would also mark a shift in the remuneration policy for staff at the financial regulatory bodies and would come two years after a regulatory revamp that was aimed at consolidating powers and oversight at the top of the government.
The State Council Information Office, which handles media queries on behalf of the Chinese government, and the regulators did not immediately reply to Reuters request for comment.
None of the three regulators disclose their exact official headcount.
The NFRA, a beefed-up version of the then banking and insurance industry regulator, was established as part of the overhaul and the agency oversees all financial sector aspects, excluding the securities industry.
The revamp also saw the NFRA and the CSRC both sitting directly under the State Council or cabinet. The PBOC has been under the State Council since 1997, but its staff wages were brought in line with the other two regulators in recent years.
As a result of the revamp, it was expected by some experts that the staff income at the financial regulators would be cut to match the salaries of civil servants at other government bodies such as the Ministry of Finance and the National Development and Reform Commission (NDRC).
Prior to the revamp, both the then banking regulator and the securities watchdog were categorized as public institutions, and their staff remuneration system allowed them to benefit from more competitive pay scales compared to other civil servants.
BOOSTING CONSUMPTION
The pay cuts at the regulators would bridge the gap within state agencies - a CSRC department head, for example, earns 300,000-400,000 yuan ($40,925-$54,570) a year, almost double what civil servants at other state institutions get, said one of the sources.
While all department heads at the three financial regulators will see their pay slashed by about half, officials below their rank will see a 40% cut, said the second source.
Some more senior officials at the director level and above will face a 60% pay reduction, the source added.
The hefty pay cuts at the regulatory bodies, however, comes at a particularly tricky time for China, which has been looking to boost consumption to revive a slowing economy, and contrasts with some recent government measures.
Millions of government workers across China were given surprise wage increases earlier this month, people affected by the move told Reuters, with average monthly wages rising by about 500 yuan ($70).
The last time China publicly announced a nationwide increase in pay for civil servants was in 2015, when the government raised pay for local officials by more than 30% as part of an effort to combat corruption and lift consumers' spending power.
Also, earlier this month, a senior party official in the megacity of Chongqing in southwestern China asked party cadres to take the lead in consumption.
Over the last couple of years, however, some local governments have struggled to pay wages to civil servants due to their worsening financial health. Other civil servants survive on as little as 4,000 yuan ($550) a month while supporting families and paying off loans.
($1 = 7.3307 Chinese yuan renminbi)
