CHINA is considering setting a salary ceiling for the top management of State-owned enterprises (SOEs), said a senior political adviser recently in Beijing.

"The State-owned Assets Supervision and Administration Commission (SASAC) is working on a plan to limit the maximum annual salary of SOE top management, and a tentative plan is to set the standard at no more than 14 times the average salary of ordinary employees,?Xu Kuangdi, vice-chairman of the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC), was quoted as saying by the Beijing Times newspaper.

Xu, former mayor of Shanghai, made the remarks at a panel discussion during the ongoing annual full session of the advisory body, in response to fellow advisers?complaints about unfairness in China's income distribution.

According to Liu Zhizhong, a senior adviser from Southwest China's Chongqing Municipality, the income disparity between different sectors and even between different persons in the same unit now varied by a factor as great as 30.

"The SASAC has taken notice of the problem and is formulating certain regulations to narrow the salary gap in the same unit,?

Xu said.

This may well put an end to the long-existing dispute on whether the government should bother about the salaries of SOEs or just give them the same freedom as their private counterparts.

Four months ago, Hangzhou in the neighbouring Zhejiang Province took a series of measures designed to provide a loose business environment for SOEs. Among the measures, one called for government to no longer examine the salaries of SOEs to better encourage their enterprising enthusiasm.

The news re-ignited the dispute and sparked opposition from scholars.

"The nature of SOEs is totally different from that of private enterprises,?according to one story in the Jiangnan Times. "The real boss of SOEs is the State, and the managers there are simply senior employees of the State, so how can a boss pay no concern at all to his employees?salary??

China doesn't lack facts showing the problems caused by loose management of SOEs.

The country's State-owned enterprises make up nearly 50 per cent of its total industrial fixed assets and receive nearly 60 per cent of domestic bank loans each year, but they contribute only about one-third of China's annual industrial output value.

Two scandals exposed late last year, in which two SOE giants ?the China Reserve Cotton Management Corp and China Aviation Oil ?lost more than US$600 million due to poor management and adventurous market speculation, riveted widespread public criticism on the overpaid yet incompetent and irresponsible CEOs of the SOEs.