Restructuring urgent to support higher salaries in private sector

A clerk counts Chinese 100 yuan banknotes at a branch of China Construction Bank in Nantong, Jiangsu province, Dec 2, 2014. [Photo/Agencies]

The National Bureau of Statistics recently released the average salaries in various sectors last year. Beijing Youth Daily commented:

Those working in the financial sector still enjoy the highest average salary of 114,777 yuan ($17,572) a year, almost twice the average for all urban employees. In the mining industry, the average salary was 3.7 percent less than the year before. This was the only sector in which the average salary fell.

The excessive liquidity and fluctuations in the securities market in recent years have contributed to the high average salary in the financial sector, as have fast growing credit loans and underground financial activities. Such situation has already had a negative effect upon the normal economic order.

Worse, some financial enterprises are prospering at the cost of the real economy. For example, the domestic A-share market experienced ups and downs in 2015, in which process some speculators made enormous profits but enterprises involved suffered huge losses.

If the current trend continues, it will not only widen the income gap, but also create bubbles, one of the biggest risks to the economy.

It is time for the regulators to accelerate economic restructuring so that the real economy gets a bigger share of the cake.

Some say it is overcapacity in some industries that has dragged manufacturing down. True there is overcapacity, but what caused that overcapacity? It was the extravagant profits to be made in the financial and realty sectors that attracted huge capital out of manufacturing and marginalized it. Then, without ample investment, manufacturing had to give up technological innovation and continue to produce low value-added products. A vicious circle has already been formed and it is necessary to break it to sustain the nation's long-term competitiveness.

The average salary growth rate of 7.2 percent in the private sector is slower than that of 8.5 percent in the public sector. This is also risky as many non-private companies are monopoly State-owned enterprises or governmental agencies. If they always enjoy higher salaries, it's not fair to their counterparts in private enterprises.

It is time to accelerate economic restructuring to get rid of these risks to China's economy.