Governing Civil Service Pay in China by Alfred M. Wu (review)

Civil service pay is an important issue, but not one that has yet been properly examined in contemporary China. According to a news report published by the Chinese media named "The Paper" (澎湃), prior to his resignation, Mei Yonghong (梅永紅), former mayor of Ji'ning City from Shandong Province, complained about his low wages as follows: "What kind of occupation it is? Who would believe I'm paid slightly more than 7000RMB per month as the Mayor of a prefecture-level city with a population of over 8 million and an annual GDP of 380 billion? The salary of party secretaries and government heads is even less, merely RMB300 per month. It is lower than that of manufacturing workers!" How much do Chinese Civil servants get paid? A lot or a little? What are the principles for calculating civil servants' remuneration? How does the pay level between civil servants from different regions vary with the different positions? How does such remuneration, both level and variation, affect civil servants' career behavior? What are the implications for us in understanding China's governance system? In spite of its popularity in daily life as well as the discussion among China's experts, the remuneration of civil servants remains an understudied issue, associated with limited knowledge and insights.

Governing Civil Service Pay in China, by Alfred Wu, has filled the gap. In this book, Wu not only presents the level of civil service pay across China, but analyzes the historical, institutional, and practical sources of its variation. I found the chapter on "Civil Service Pay Level" (Chapter 7) of most interest. Civil service pay level is a controversial issue in contemporary China. On the one hand, a growing number of civil servants have left their position due to the unreasonably "low pay." On the other hand, some citizens continue to perceive public office as a "golden bowl," and the number of applicants in this area remains at a surprisingly high level. Based on detailed data and careful calculations, Wu reveals that civil servants have been generally well paid in China since the late 1990s, although there was a slight drop after 2009. According to Wu, China intentionally set a low salary level for civil servants in 1956, with Deng Xiaoping's "Rational Low Wage Payment" principle. The government intended to increase their pay as part of the 1985 reform, yet failed to do so as the "real wages were eroded by serious inflation" (p. 159). Since the mid-1990s, driven by pressure from the private sector, the government has finally increased the salary level in the public sector. Statistics show that the annual salary of state employees rose from RMB3,392 in 1993 to RMB20,828 in 2005, and civil service pay was ranked tenth among 19 sectors between 2003 and 2010.

It is a truth universally acknowledged that remuneration is more about distribution than pay level with regard to motivating employees. In Chapter 3, Wu presents highly detailed information on the growing gap in remuneration across different regions between 1985 and 2000. In China, the regional gap in civil service pay is highly significant. In 2000, the average annual salary of civil servants reached 20,659 in Shanghai, while it remained at RMB9,991 in Liaoning. Such gaps are rooted in the "cost-of-living allowance." As early as 1956, China was divided into 11 salary zones according to the living costs in each locality. Although these salary zones were later disbanded, a new item, the "cost-of-living allowance" was introduced to cover living costs in 1990. With a decentralized pay determination system in a decentralized fiscal system, local governments' fiscal capacity further expands and consolidates the civil service pay gap across China. The variation in civil service pay between position ranks is also quite significant, even within the same region. Wu shows that the section member and clerk in Shenzhen could receive RMB3,134 per month, while the county head could get RMB5,118 per...