Knowing China through Taiwan

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Chinese investment firms post major losses; managers don't

  • Staff Reporter
  • 2012-04-05
  • 10:39 (GMT+8)
Insiders say Chinese fund managers' salaries are approaching those on Wall Street. (Photo/Xinhua)

Insiders say Chinese fund managers' salaries are approaching those on Wall Street. (Photo/Xinhua)

Sixty-four investment firms in China together suffered losses of 500 billion yuan (US$80 billion) in their funds last year, while fund managers were earning millions of yuan in annual salaries.

According to the latest figures, 64 investment firms in China managed 971 mutual funds in 2011. Together these funds suffered losses of 500 billion yuan, the most significant figure since the 2008 financial crisis. Among the investment firms, 18 posted losses of more than 10 billion yuan (US$1.6 billion). Deficits were recorded by 814 of the 971 mutual funds.

Despite the losses, firms' consulting fees have changed very little. Brokers together collected fees worth 29 billion yuan (US$4.6 billion) in 2011, compared to 30 billion (US$4.7 billion) the year before.

What is more, the annual salaries of fund managers remained high despite the poor showing. Insiders say salaries began to skyrocket in 2007, and are now close to the levels seen on Wall Street. The average salary for fund managers was 5 million yuan (US$800,000) in 2011. One Guangzhou-based manager earned 40 million yuan (US$6.3 million) for the year. These salaries, of course, do not include stock options.

In China, fund managers' salaries have even less to do with results than for their Wall Street counterparts. As a result, many in the country have called for calculating salary based on fund performance.

Who's Who

  • Chang Xiaobing (常小兵)

    Chang Xiaobing (常小兵)

    Chang Xiaobing is chairman of China Unicom, one of the country's three major state-run telecoms. He has over 20 years of operational and managerial ...