88858cc永利官网·(中国)官方网站

Author: Miao Qi Source: China Business News Time: 2014-02-18 06:33


From last December 11 up to now, the reorganization work of East Best & Lansheng Group has nearly come to an end. The said Group is widely known as the pioneer to “fire the first shot of Shanghai’s reform of state-owned assets and enterprises”. For Chi Hong, President of East Best & Lansheng Group, who was transferred from Guosheng Group, it’s a trans-industrial challenge from functional enterprise to competitive enterprise. 

During the interview with China Business News, Chi Hong stated that the Board of Directors was under establishment. As to the strategic layout in the future, the Group will adhere to its main lines of business and focus on the modern service industry. Besides the exploration of “SFSC Asia-Pacific Strategy”, East Best & Lansheng Group’s blueprint in 2014 is to “keep the growth rate of the business revenue and the net profit to the mother company at a two-digit level, namely, over 10 per cent”. 

In the eyes of Chi Hong, the most prominent benefit of the “20 Regulations on the Reform of Shanghai’s State-owned Assets and Enterprises” for the competitive state-owned enterprises (SOEs) is to further nail down their market subject status, including perfecting the corporate governance structure, enhancing the power of the Board of Directors and reducing, or even eliminating intervention from the government. Promoting the SOEs to develop into mixed ownership company towards marketization is the main route of competitive enterprises.


Bring into Play the Effect of Joint Reorganization


China Business News: How is the progress of East Best & Lansheng Group’s joint reorganization?

Chi Hong: From the announcement in last December up to now, East Best & Lansheng Group has completed several items of work: The leadership members have been in place, the Group’s functional departments have been adjusted and optimized and staff members of the headquarters have been in place. 

The Board of Directors is still being organized and will be composed of inside directors and outside directors. According to the “20 Regulations on the Reform of Shanghai’s State-owned Assets and Enterprises”, the Board of Directors in the competitive enterprises like ours will mainly be made up of outside directors, namely, with the number of outside directors exceeding the inside directors.

This year’s major task is to bring into full play the joint reorganization effect, promoting the specialization and intensification of business within the company and employing the means like investment and acquisition to expedite the domestic and overseas business layout with a view to improve the market share and strive to reap the first fruit of reform.

China Business News: How will the strategic layout of East Best & Lansheng Group change after the joint reorganization?

Chi Hong: East Best & Lansheng Group will as always adhere to its main lines of business, focus on the modern service industry and concentrate on HR service, convention & exhibition service and international trade service.

The first major segment is human resources service, which is an important component of modern service industry. Firstly, the layout must be expanded. Originally, East Best Group’s HR service business scope was mainly in Shanghai region. From now on, East Best & Lansheng Group’s “SFSC China Strategy” will accelerate and expand from Shanghai to the whole country. At present, SFSC boasts branches and subsidiaries in many provinces and municipalities and this trend will speed up. We are also exploring “SFSC Asia-Pacific Strategy” and going abroad to create a global HR service company. The first step of globalization is to enter the Great China Area and the Asia-Pacific market to further elevate the corporate competitiveness.

Secondly, we will enhance R&D and design of HR service products and create some new service products in accordance with the industrial chain and value chain. In addition to the HR agency service, East Best & Lansheng is now developing other HR service products like flexible welfare, medical health insurance, employee physical checkup, training, consultation and business process outsourcing.

The second major segment is convention & exhibition service. The primary task of East Best & Lansheng Group is to build National Convention and Exhibition Center in Hongqiao, a major project of Shanghai. The Government’s Work Report delivered by Mayor Yang Xiong clearly requires the basic completion of the Center in 2014. This year, we will run some important exhibitions like CIIF 2014 and Shanghai Technology Progress Trade Show.

The third major segment is international trade. This year, we will strengthen the reform of SOEs and promote the development of mixed ownership economy with great effort. We will introduce social capital and allow the operators to hold shares so that the corporate vigor especially the motive power of the operation team can be further aroused. Once the system and mechanism are changed, the sense of responsibility and enterprising spirit of the operators will be greatly changed.


The Government Has Enhanced Empowerment


China Business News: It’s widely agreed that East Best & Lansheng Group’s reorganization is “the first shot of Shanghai’s reform of state-owned assets and enterprises”, what do you think of it? 

Chi Hong: The municipal government announced the joint reorganization of East Best Group and Lansheng Group just after the Convocation of Shanghai’s State-owned Assets and Enterprises Reform Meeting. It is just a coincidence. 

The reorganization of East Best Group and Lansheng Group has been on the agenda for over two years. The current Chairman of the Board Dai Liu of East Best & Lansheng Group was originally Chairman of the Board of East Best Group and appointed as Chairman of the Board of Lansheng Group two years ago. Dai Liu has done considerable preparatory work over the last two years. The joint reorganization was announced following the convocation of Shanghai’s State-owned Assets and Enterprises Reform Meeting, when the time was ripe at this time node, so there’s no special arrangement.

China Business News: As a competitive enterprise, what impact will the classified management of SOEs have on East Best & Lansheng Group?

Chi Hong: The principal benefit of the “20 Regulations on the Reform of Shanghai’s State-owned Assets and Enterprises” is to further define its market subject status. For example, it has further intensified the establishment of legal governance structure and enhanced the power of the Board of Directors. In the future, the competitive enterprises will have greater power in the selection and recruitment of the Board of Directors including the operational members like Vice Presidents. Therefore, it will be more market-oriented, especially in terms of performance appraisal and stimulus of the business operating teams. The government will have less and less intervention into the competitive enterprises and will thus further enhance empowerment or decentralization. 

After the convocation of Shanghai’s State-owned Assets and Enterprises Reform Meeting, many items of examination and approval power of Shanghai SASAC such as the filing right of assets, disposal of assets, the right to write off bad debts and the discretion of payroll have been delegated to the enterprise groups. In the future, decisions on such major issues will be made by the Board of Directors.


Flexibly Employ Different Financing Means


China Business News: What plan does East Best & Lansheng Group have in financing?

Chi Hong: Definitely, East Best & Lansheng will have financing needs, which are related to the development strategy and operation plan of the enterprise. The development of mixed ownership economy itself includes optimization of capital structure and collection of new capital. The enterprise will flexibly employ different financing tools and means according to the needs in development and the situations of the capital market.

China Business News: The “20 Regulations on the Reform of Shanghai’s State-owned Assets and Enterprises” contains a clear-cut objective for the cultivation of enterprises with international competitiveness. Do you think East Best & Lansheng will be one of the “five to eight companies”? 

Chi Hong: The Regulation mentions “five to eight multinational groups with global layout, cross-border operation, international competitiveness and brand influence”, but the status quo of East Best & Lansheng Group shows us some distance. Its requirement is relatively high, especially on the degree of international operation. In the near future, we hope that our company will become one of the “eight to ten” enterprises, namely, an enterprise group with national layout, overseas development and advanced overall strength.