Updated: 08/30/2014 03:17 | By Agence France-Presse

China announces cuts to executive salaries at state companies

China's top leaders decided on Friday to cut salaries and restrict expense accounts and other perks of executives at state-owned enterprises (SOEs), official media reported, as they pursue a crackdown on corruption and extravagance.

China announces cuts to executive salaries at state companies

Chinese President Xi Jinping (2-L) at the Great Hall of the People in Beijing on August 25, 2014 - by Diego Azubel

The decision was taken at a meeting of top leaders of the ruling Communist Party of China (CPC) and chaired by party General Secretary Xi Jinping, the state-run Xinhua news agency said.

"The Political Bureau of the CPC Central Committee approved plans to reform the system that determines centrally administered SOE executives' salaries and the size of their expense accounts and other privileges," Xinhua said.

Citing a Political Bureau statement, Xinhua said that "excessive salaries will be cut to reasonable levels".

Xinhua provided no exact amounts, however, China's respected Caijing business magazine reported earlier that authorities had started soliciting public opinions on a draft rule to cut SOE executive salaries to around 30 percent of current levels with annual pay capped at 600,000 yuan ($97,000).

The Political Bureau statement called on SOEs to improve corporate ethics, stressing that executive-employee income disparities as well as salaries across various industries should be kept at what the Xinhua report described as "an appropriate level".

Since becoming head of the Communist Party in November 2012 and China's president in March last year, Xi has pushed an austerity campaign among top officials and a high-profile crackdown on corruption designed to rein in spending.

Xinhua also said that ceilings are planned for expense accounts of SOE executives as well as prohibitions on things including official vehicles, offices and domestic and overseas business trips.

"They strictly prohibit any spending of public funds for personal purposes, vowing to stop misuse of such funds for club memberships, healthcare, entertainment and anything else irrelevant to executives' duties and SOEs' operations," Xinhua said.

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