Move FM Global News

BEIJING, China: In line with a Chinese government austerity drive aimed at narrowing the wealth gap, Chinese financial firms have adopted measures, such as cutting salaries and bonuses, asking staff not to wear expensive clothes and watches, and limiting travel and entertainment expenses.

Amid slowing growth in the world’s second-largest economy, with youth unemployment hitting record highs, authorities in the communist country have pledged to combat corruption in the country’s $57 trillion financial sector.

The wealthy and flashy bank staffs are among the highest-paid workers in China and their lifestyles have often come under criticism from the public on social media.

Earlier this year, China’s anti-graft watchdog vowed to eliminate the presence of a Western-style “financial elite” and hedonism of excessive pursuit of “high-end taste.”

In response, both state-owned and private-sector financial firms have adopted measures to comply with authorities, as well as the official rhetoric from President Xi Jinping’s “common prosperity” drive.

From this year, Industrial and Commercial Bank of China (ICBC) and China Construction Bank Corp (CCB) plan to cut some allowances of employees at their headquarters.

Earlier this month, Reuters reported that CITIC Securities will reduce wages across its investment banking division, lowering base salaries by up to 15 percent.

Last month, China International Capital Corp reduced this year’s bonuses for investment bankers by 30 to 50 percent from one year earlier, Reuters added.

After the launch of reforms ordered as part of a broader drive to reduce income disparities, China’s securities regulator and central bank cut the budget allocation for employee salaries in 2023, Reuters added.

“Inequality in China has reached a high level for a long time,” said Xin Sun, as quoted by Reuters, who teaches Chinese and East Asian business at King’s College London, adding what the Party now does by cutting the benefits of “financial elites” is aimed at reducing inequality within the regime, in a bit to ensure political stability.