Executive salaries at China's largest state firms linked to 'party building' efforts

BEIJING (Reuters) - Salaries of executives at China’s largest state-owned enterprises (SOEs) will be directly linked to their performance on tests by the ruling Communist Party to assess their “party building” efforts, state media said on Tuesday.

Flags flutter ahead of the opening session of Chinese People's Political Consultative Conference (CPPCC) at Tiananmen Square in Beijing, March 3, 2015. REUTERS/Kim Kyung-Hoon

President Xi Jinping has overseen a push to re-establish the party in Chinese business and institutions, stating that a “key few” loyal and talented officials should play a greater role in leading the country.

These efforts, often described as efforts to strengthen party discipline, dovetail with Xi’s war on graft, a multi-year campaign to target offenders at all levels.

New rules released on Sunday will create for the first time a “system of responsibility” to ensure appointed executives are carrying out work to promote party ideology in China’s national-level SOEs, the party’s official People’s Daily newspaper reported.

A meeting by the State-owned Assets Supervision and Administration Commission (Sasac), which appoints top executives in SOEs and approves mergers and sales of their assets, was held in Beijing on Monday.

It was decided that the rules will link pay, appointment or dismissal and other rewards or punishments to assessments of how well individuals carrying out “party building” work, the article said.

“We must resolutely assess party building, without tests there is no way to hold (people) accountable,” Hao Peng, party secretary of Sasac said at the meeting, according to the state broadcaster.

The party appoints party executives to top positions in SOEs, and party loyalty has always been a part of assessing officials’ performance. Practically all large institutions and companies have a party unit.

But as China’s SOEs began to internationalize and take some entities public, the party role has waned in some organizations, with executives choosing their business role over party work, a phenomenon the new rules hope to address.

“The party committee secretary and chairman are shouldered as one; two jobs, two duties with only one person in charge; we must resolutely avoid paying attention to one while neglecting the other,” Hao Peng said, according to the People’s Daily.

(This story corrects third last para to reflect that not all companies have party units)

Reporting by Christian Shepherd; Editing by Kim Coghill