Jilino1 tv.Jilino1 tv,Jilino1 tv

News

China’s Banks Cut Salaries

In China, the banks that demonstrate the most intensive dynamic of development have reported the largest wage cuts.

China’s Banks Cut Salaries

The mentioned actions of financial institutions are likely to become a factor in increasing pressure on employment in the specified Asian country. It is worth noting that in recent years, employment in China has been what can be described as a problem.

Also in the Asian country, 10 state-controlled financial institutions demanded that employees return payments received as bonuses. The mentioned actions of creditors are reported by the media, referring to the data of official documentation. It is worth noting that the Chinese leadership is currently implementing efforts to reform the banking sector.

The reason for the significant reduction in salaries is that 12 national joint-stock banks are increasingly facing debt problems resulting from the crisis in the Asian country’s real estate area. Also, the activities of financial institutions are negatively affected by the continuing increase in the debt of the Chinese municipal authorities.

It should be clarified that the specified 12 banks include creditors that are owned by shareholders and controlled only by them.

The media reports that the decisions to reduce salaries were made by those financial institutions whose assets are not much less than the same indicator of the six largest creditors of the Asian country, which are also called the Big Six. It is worth noting that these measures to a certain extent reflect the problems that the Chinese economic system is currently facing. It is expected that in the foreseeable future, banks in the Asian country may decide to cut salaries again. This point of view is very realistic since the Chinese economic system is currently in the condition of a downturn and so far there are no signs that this state of affairs will change in a positive sense shortly.

Bohai Bank, based in the northern municipality of Tianjin, reported an 11.8% pay cut. Now, in this financial institution, the average annual salary per employee is 438,000 yuan ($60,621). It is worth noting that the mentioned municipality is one of the most heavily indebted in China.

Ping An Bank has decided to cut wages by 8.5%. China Merchants Bank and China Citic Bank have reduced the corresponding figure by 6%. The Industrial Bank cut wages by 3.3%. Everbright Bank reported a decrease in this indicator by 3%. The information was published by the media with reference to data on human capital expenditures contained in the financial reports of lenders for 2023. The specified data includes welfare and other items. In China, these figures are used as a proxy to show salary trends.

At the same time, as above mentioned, 10 financial institutions, including state-owned banks, joint-stock lenders, and commercial and rural commercial lenders, reported that last year they demanded that employees return bonuses based on performance. The total amount of these bonuses is 99.88 million yuan. In 2022, the corresponding figure was only 3 million yuan.

It is worth noting that, despite the obvious difficulties that banks are forced to reduce salaries, which is evidence of the need to save money, competition in the Chinese banking sector continues to be very fierce. This is stated by representatives of the mentioned functional environment.

Returning to the topic of bonuses, it should be noted that China Merchants Bank has ordered 4,415 employees to return 43.3 million yuan. Bohai Bank has made a corresponding request to 499 employees.

The media, referring to a certain banker from Guangzhou, who uses the right of anonymity because of the sensitivity of the issue under discussion, report that over the past few years, almost all employees of Chinese financial institutions have faced salary cuts. Currently, the ratio of actual and payable wages is about 60%. This was also reported by the mentioned banker.

Currently, an employee who has worked at the ICBC branch for 20 years earns about 200,000 yuan per year. This figure is significantly less than the amount of wages that were paid before the coronavirus pandemic. This was told by a banker from Guangzhou. It is also known that all new colleagues of the insider who have graduated from world-renowned universities earn a salary of about 6,000 yuan per month after paying taxes.

At the same time, Beijing has ambitious goals to improve the situation in the sphere of employment. This year, the Chinese leadership intends to create more than 12 million new jobs in urban areas. In 2023, 12.44 million new jobs were created.

Also in the current year, Chinese universities will graduate a record 11.79 million people. Many experts believe that the employment situation in the Asian country will worsen against this background.

In China, in February, the unemployment rate among young people aged 16-24, excluding students, was fixed at 15.3%. In January, this figure was 14.6%.

ICBC, China’s largest financial institution by assets, and Construction Bank, one of the Big Six, reduced human capital spending by 2% last year.

At the same time, managers of several lenders, including China Merchants Bank, Citic Bank, China Zheshang Bank, and China Minsheng Bank, faced maximum salary cuts of more than 60%. This was reported by the state media of the Asian country.

The head of the People’s Republic of China, Xi Jinping, sets himself the goal of establishing a financial superpower. Within the framework of the relevant initiatives, it is planned to form a modern corporate system with Chinese specifics. This means that it is highly likely that financial institutions in the Asian country will face new rules governing their activities.

In 2021, in China, the local banking regulator initiated a mechanism of pay deferral and clawback to deter and monitor senior executives and employees in positions of responsibility. It is worth noting that this mechanism also applies to resigned and retired employees.

In 2023, banks accounted for about 90% of China’s financial industry with a turnover of 461 trillion yuan. It is worth noting that most financial institutions were controlled by authorities at various levels.

As we have reported earlier, Chinese Authorities Signal Possibility of Starting Trading Government Bonds.

Serhii Mikhailov

2865 Posts 0 Comments

Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.