Chinese finance firms ask Hong Kong staff to pay back part of their bonuses
- Some of China’s largest state-backed financial firms are asking employees in Hong Kong to return a portion of their pay, as part of President Xi’s ‘common prosperity’ push
The clawback amounts to less than 10 per cent of bonuses at China Everbright, the main Hong Kong-listed arm of Everbright Group, one of the people said, after the central government inspected its local operations. It is unclear how many employees will be affected by the policy and how far it will extend below the executive ranks.
The development marks an escalation of austerity efforts at state-owned financial conglomerates, which have so far mainly limited pay for mainland-based employees. Chinese bankers have come under increasing pressure in recent years as the Communist Party tightened its grip on the US$66 trillion financial sector, where high pay has also drawn public criticism during an economic slowdown.
Xi’s signature drive has sent shock waves through China’s financial industry since it was rolled out in 2021. Firms across China have slashed salaries and asked staff to return part of past pay cheques that have now been deemed too high.
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It is unclear how many financial entities will be subject to the latest guidance. But the move may add to questions about how long Hong Kong can maintain its status as a financial centre, which was undermined by pandemic-era travel restrictions and political upheaval. It could also delay a recovery in the city’s sluggish retail sector and property market.
