Starting this month, workers at the People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission will see their salaries reduced by about 50%, according to four sources.
These significant pay cuts come as China aims to boost consumption, particularly among civil servants, to help maintain a stable growth rate by 2025.
This move also represents a change in how staff at these financial regulatory bodies are compensated, following a regulatory overhaul two years ago that sought to consolidate power and oversight at the government level.
In the meantime, the PBOC has committed to lowering borrowing costs for banks this year to help alleviate pressure on their net interest margins.
In December, new yuan loans reached 990 billion yuan (about HK$1.05 trillion), surpassing market expectations, following a series of stimulus measures from Beijing in recent months, as reported by Reuters based on central bank data.
By the end of last month, foreign institutions held 4.16 trillion yuan in China's interbank market bonds, with foreign investors purchasing around 10 billion yuan in new bonds in December, ending a three-month decline in holdings.
Goldman Sachs and its clients are taking a cautious wait-and-see stance on whether Chinese authorities will implement major stimulus measures to revive the economy, especially after observing some positive momentum in the latter half of last year, according to Kevin Sneader, president of the Asia-Pacific ex-Japan division at the bank.
Sneader mentioned in an interview on Bloomberg Television in Hong Kong that there has been "some reallocation" back to China from clients, but there remains a level of caution regarding investments in the country.