As Beijing pushes the “One Belt, One Road” development plan, Chinese enterprises will face a severe shortage of professional talents in financial and legal fields. If the problem is left unaddressed, it will constrain the firms in their “going out” efforts.
Such shortage happened before after China joined the World Trade Organization in 2001. Many companies found themselves exhausted in handling anti-dumping and anti-subsidy investigations at that time.
One of the most well-known cases is a trade dispute between the United States and China in 2009 over tire tariffs. CNOOC’s (00883.HK) attempted takeover of US firm Unocal Corp. is another case.
Due to the lack of professional talents who were familiar with the legal, political and business environment, CNOOC selected a wrong time to launch the US$18.5 billion bid, prompting political attacks in US Congress and forcing the firm to eventually drop the acquisition plan.
Legal talents with global vision and social ability are in urgent need. Hong Kong has the advantage and experience to nurture these talents.
Since the 1980s, Hong Kong companies have actively participated in the planning, construction and management of projects overseas in sectors such as energy, infrastructure and telecom.
As their involvement was spread across diverse geographies in Asia and Europe, it has helped the city accumulate rich legal experience with regard to foreign ventures.
In the “One Belt, One Road” strategy, the “belt” includes countries situated on the original Silk Road through Central Asia, West Asia, the Middle East, and Europe. The “road”, also known as the 21st Century Maritime Silk Route Economic Belt, covers Southeast Asia, Oceania, and North Africa, through several contiguous bodies of water.
The Belt and the Road will pass through many Islamic countries which have relatively high reliance on Hong Kong legal services.
Besides legal talents, Hong Kong can also provide the support of financial professionals.
Data shows that there are about 100,000 people working in the financial industry in Shanghai, accounting for about 1 percent of the city’s population. The percentage is far below the general standard, 10 percent, to recognize a city as an international financial center.
In contrast, Hong Kong has 330,000 people in the industry. Although the figure is lower than that of New York, which has 770,000 such workers, Hong Kong still has a huge comparative advantage over the mainland.
In addition, Hong Kong has prepared a compatible talent development strategy.
Unlike what the mainland does to attract overseas financial talents, Hong Kong’s strategy is on the ground of local demand — on one hand, it nurtures financial talents from the traditional education system; on the other, it encourages employees in the industry to take part-time training or further education in response to the market demand for financial personals.
The system also ensures that overseas financial talents are helped in getting adapted to the local environment.
If China and Hong Kong can strengthen cooperation and communication over talents, and if the mainland has more frequent exchanges of information and exchanges with organizations in Hong Kong and elsewhere, it will definitely speed up the ‘going out” initiatives of Chinese enterprises.
This article appeared in the Hong Kong Economic Journal on Sept. 30.
Translation by Myssie You
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