How are they paid? A study of civil service pay in China
| Date | 01 June 2011 |
| DOI | 10.1177/0020852311399231 |
| Author | Jun Ma,Hon S. Chan |
| Published date | 01 June 2011 |
| Subject Matter | Articles |
International Review of
Administrative Sciences
77(2) 294–321
!The Author(s) 2011
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DOI: 10.1177/0020852311399231
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International
Review of
Administrative
Sciences
Article
How are they paid? A study of
civil service pay in China
Hon S. Chan
City University of Hong Kong – Public and Social Administration,
Hong Kong
Jun Ma
Sun Yat-sen University
Abstract
The importance of pay in developing a professional, effective, and honest civil service is
widely recognized. The World Bank and OECD have made uninterrupted efforts to
encourage many developing countries to carry out pay reform. This study provides
useful information for researchers and practitioners to compare civil service pay reform
between China and other developing countries. It assesses the level of civil service pay
by comparing it with pay in other sectors in China, using updated and credible data
recently made available. It clarifies several points in the debate over civil service pay in
China and provides new perspectives on the issue of whether the civil service pay in
China is high or low. The analysis and findings in this study will be of interest to
researchers and practitioners beyond China because the Chinese experience with
civil service pay reform has important points in common with similar reforms else-
where. For example, the Chinese phenomenon of large, non-wage, largely unreported
and unofficial, civil service pay in China resembles practices in developing nations such
as Vietnam, Egypt, Tanzania, Zambia, and Uganda. Nonetheless, to the extent that pay
reform is driven by internal circumstances, strategies and objectives are likely to differ
even though the basic problems of wage disparities, anti-corruption, and low civil ser-
vice performance are similar. Given its economic importance and valuable reform expe-
riences, China may provide a model for reforms elsewhere. This study also provides a
benchmark for future research and cautions researchers to view official pay scales
potentially as serious understatements of actual remuneration.
Points for practitioners
Many developing and transitional countries have attempted to reform their pay systems,
with mixed results. This study provides useful information for researchers and practi-
tioners to compare civil service pay reform between China and other countries. China’s
experience in establishing a new civil service pay system provides two useful lessons for
practitioners elsewhere. First, the elimination of non-wage income is vital to successful
Corresponding author:
Hon S. Chan, City University of Hong Kong – Public and Social Administration, Hong Kong
Email: sahschan@cityu.edu.hk
pay reform. Second, reining in non-wage income requires budgetary reform, whereby
off-budgetary funds that finance non-wage benefits are incorporated into the formal
budget and subjected to proper supervision. China can also learn from other developing
and transitional countries’ experiences, particularly with regard to public sector
downsizing.
Keywords
civil service, personnel policies, public finance
Introduction
During the past few decades, pay reform has been a significant phenomenon in devel-
oping countries. Dominating the World Bank’s first wave of lending for civil service
reform (1987–93) were projects addressing the problem of wage components (World
Bank, 1999). A 1995 World Bank report identified four key interventions as central
reform elements: excessive public sector wage bills; the surplus of civil servants; the
erosion of public service salaries; and wage compression (Nunberg and Nellis, 1995).
The capacity to deliver pay reform is central to assessing the institutional perfor-
mance and development of a government in a developing nation such as China.
The World Bank attributed the failure of pay reform of many developing nations
to their resistance to promoting merit-based civil services modeled on the experiences
of advanced countries (Shepherd, 2003). Further, a common theme of recent pay
reform in OECD countries is to enhance markets while reducing the role of the state.
China, the largest socialist regime and the largest developing country in the world,
has been unable to deal successfully with the problems of growth and distribution by
using either an efficiency-oriented market or an equity-oriented planned pay system
(Sun et al., 1988). Given its economic performance and its valuable experience,
China may provide lessons for many other developing countries. Anyone who
wants to understand China’s government must understand its civil service, including
the pay system.
Whether civil servants in China are underpaid has long been an intriguing ques-
tion. This study uses available data, mostly from official sources, to provide an
analysis of the Chinese civil service pay system. We provide evidence that although
the basic pay of civil servants is comparatively lower than that of the workforce in
other sectors, the total compensation for civil servants inclusive of fringe benefits
and subsidies is not: indeed, the total compensation for civil servants is higher than
workers in many other sectors. We explain a peculiar phenomenon in China’s civil
service pay system and the reason why welfare benefits and subsidies exist outside
of the wages of civil servants.
As we will show, there are substantial similarities in the phenomenon of large,
non-wage, usually unreported and unofficial, remuneration for civil servants in
China and elsewhere, including Vietnam, Egypt, Tanzania, Zambia, and Uganda.
Nonetheless, to the extent that reform is driven by different internal circumstances,
there are likely to be objectives, strategies, and measures of change that differ
Chan and Ma 295
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