HONG KONG — From cutting salaries and bonuses and asking staff not to wear expensive clothes and watches at work, to reining in travel and entertainment expenses, Chinese financial firms have jumped on an austerity drive as Beijing pushes to bridge the wealth gap.
The steps come as authorities vow to clamp down on corruption in the country's US$57 trillion financial sector and as growth in the world's second-largest economy weakens, with youth unemployment hitting a record high.
That has prompted a slew of financial firms, both by state-owned and private sector, to take proactive measures to ensure they don't fall foul of the authorities, even as official rhetoric on President Xi Jinping's"common prosperity" drive has ebbed. The mid-sized bank's employees have been asked to not wear luxury brands or carry luxury bags at the workplace, said a person at the lender, adding staff have also been told they can't stay at five-star hotels when travelling for work.
Allowances to be impacted include one-time summer allowances of about 1,500 yuan ) to 2,000 yuan a month, which will be abolished from this month, said the sources, who also declined to be named.CITIC Securities is cutting pay across its investment banking division, lowering base salaries by up to 15 per cent, Reuters reported earlier this month, in a rare move as Beijing pushes to bridge income disparity.
To strengthen the ideological and political role of the party in China's overall financial system, Beijing is setting up a new financial watchdog as part of a broad reorganisation of government bodies in President Xi's third term as president.
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