Study inquires into widening profit-wage gap in SOEs

WENG Jie and ZHOU Li

College of Business Administration, Zhejiang University of Technology
Abstract:

This paper studies the trend in which industrial enterprises’ benefits allocation pattern changed, and the reasons for those rapid changes in China from 1997 to 2007. The results reveal that the benefits allocation pattern of industrial enterprises in China changed rapidly during the periods of 1998-2000 and 2003-2007. This paper discovers that the ramifications of state-owned enterprises’ three-year reform plan, aimed at getting themselves out of a dire economic predicament, are the main reasons for the rapid changes in industrial enterprises’ benefits allocation pattern from 1998 to 2000. The structural changes in ex-factory price of industrial products from 2003 were the main reason benefits allocation patterns of industrial enterprises changed in favor of capital during 2003-2007.

Key words:

Benefits allocation, wages, profits, state-owned enterprises reforming, ex-factory price of industrial products

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