Xiao Chen*, a private equity worker based in Shanghai, never thought his once-promising career in China’s finance sector would take such a dramatic turn. Three years ago, Xiao Chen was making nearly 750,000 yuan ($106,200) a year, and his future in finance seemed bright. Fast forward to today, and Xiao Chen finds himself earning half of what he once made, with bonuses gone and salaries frozen. What was once considered a prestigious and glamorous industry has now become a source of uncertainty and frustration for professionals like Xiao Chen.
China’s financial sector has undergone a seismic shift in recent years, driven by President Xi Jinping’s policies aimed at curbing excessive wealth and addressing growing income inequality. Under the banner of “common prosperity,” the government has launched a crackdown on industries such as real estate, technology, and finance. Once viewed as the backbone of China’s rapidly growing economy, these sectors are now seen as targets for reform, as the government seeks to reduce the wealth gap and promote more equitable growth.
For finance professionals like Xiao Chen, these changes have been acutely felt. The once-luxurious lifestyle that came with working in the industry—complete with international travel, high-end fashion, and a generous salary—has been replaced by a more modest existence. Instead of vacationing in Europe, Xiao Chen now opts for cheaper destinations in Southeast Asia, and luxury brands like Burberry and Louis Vuitton are no longer within reach. While Xiao Chen has managed to avoid the more severe consequences of the crackdown, others in the industry have not been so fortunate.
In recent years, several high-profile finance officials and executives have been detained as part of the government’s anti-corruption campaign. Among them is the former chairman of the Bank of China, whose arrest sent shockwaves through the finance industry. At the same time, pay cuts across banking and investment firms have become a common topic of discussion on social media platforms like Xiaohongshu, where finance workers openly voice their dissatisfaction with the current state of the industry.
The frustration within the finance sector came to a head in July 2022, when a social media post boasting about a finance worker’s high salary went viral. A user on Xiaohongshu bragged about her husband’s 82,500-yuan monthly salary at China International Capital Corporation, drawing attention to the massive wage disparity between finance professionals and the average worker. In Shanghai, where the average monthly salary is just over 12,000 yuan, the post sparked widespread outrage and reignited a debate about income inequality in China.
This debate coincided with President Xi’s broader push for “common prosperity,” which aims to promote more equitable income distribution across the country. In response, the government introduced new regulations in August 2022, requiring companies to “optimize internal income distribution” and redesign their salary structures. These policies have led to widespread pay cuts within the finance industry, as companies struggle to comply with the government’s directives.
Behind the scenes, the situation is even more complex. Alex*, a manager at a state-controlled bank in Beijing, explains that while the government’s directives are rarely communicated explicitly, the message is clear: salaries are capped. “You won’t find any official documents outlining salary limits,” he says, “but everyone knows there are restrictions.” This lack of transparency has created a sense of unease within the industry, as financial institutions scramble to adjust to the new regulatory environment.
For Xiao Chen, the impact of these changes has been profound. With fewer companies launching shares on the stock market and foreign investment in China on the decline, his workload has diminished significantly. Once responsible for managing high-profile projects, Xiao Chen now spends his days completing routine administrative tasks. “The morale within the team is low,” he says, noting that many of his colleagues are already planning their next moves. “People are thinking about what they’ll do in three to five years.”
Despite the widespread frustration, there is little evidence that finance professionals are leaving the industry in large numbers. While some layoffs have occurred, job opportunities in China remain scarce, and even a lower-paying finance job is seen as better than no job at all. However, the dissatisfaction is clear, with one Xiaohongshu user comparing the current job market to a game of musical chairs: “If you stand up, you might find your seat is gone.”
Xiao Chen also notes that finance professionals are no longer viewed favorably in Chinese society. “We’re not even desirable on blind dates anymore,” he says. “If someone hears you work in finance, they’re not interested.”
As China’s economic policies continue to evolve, the future of the finance sector remains uncertain. For professionals like Xiao Chen, the once-thriving industry has become a source of anxiety, and the road ahead is far from clear.
The names of the finance workers have been changed to protect their identities.
