The State Council released guidelines for deepening reforms in state-owned enterprises (SOEs), stressing that it’s taking a market-oriented approach and expecting to see “decisive results” in key areas by 2020.
Hong Kong is an international financial center. Professionals in the finance and trade industries should proactively participate in the SOE reform, such as by building cooperation and joint ventures, and engaging in merger and acquisition deals, which in return could become a new growth engine for the city’s economy.
The guidelines say that the SOE reform welcomes various types of investors to develop a “mixed-ownership” economy. It also encourages SOEs to go public after ownership structure reform.
According to media reports, the central government will open up several eligible projects to private investors. These projects cover seven sectors, including oil, natural gas, electricity, railways, telecommunications, resource development and public utilities.
In addition, the guidelines for the first time mentioned “the talent capital”, which means the central government has achieved a breakthrough in recognizing the importance of talents in the SOE reform. SOEs will be allowed to hire talents through Western-style screening for various positions.
Hong Kong has a large pool of professional talents, such as those in arbitration, financing, accounting and due diligence, among others. Talents define Hong Kong’s future.
A source familiar with the matter disclosed that Hong Kong’s talents import regime is about to undergo substantial changes to attract mainland talents. The local government is attempting to offer incentives, fund injections and intellectual support to accelerate the integration of high-tech and market economy.
I believe that by strengthening two-way communications and exchange of talents across the border, Hong Kong and the mainland can both achieve the transformation from “human resources” to “talent capital”.
SOE reform is a precious opportunity for Hong Kong. Hong Kong can assist SOEs in attracting overseas capital. It can introduce advanced corporate governance theories and regulatory rules, as well as help improve efficiency and transparency.
The SOEs can thus learn from the experience of international companies and encourage them to go out into the global market.
This article appeared in the Hong Kong Economic Journal on Sept. 22.
Translation by Myssie You
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