National Policy: Starting with the Experience of Singapore - A Collection of Policy Papers by Wang Kangmang

Author: Wang Kangmo / Country: Mainland China
Publisher:
Publish Date: 2006-08-01
Features: Dr. Wang Kangmo, a national strategist, the conscience of the nation, and the voice of the people. — China Talent
Dr. Wang Kangmo and his outstanding contemporaries made contributions to the country. I have heard that during his time studying abroad, Dr. Wang Kangmo proposed numerous sound strategies for the securities industry. Since the mid-1980s, he has put forward policy suggestions such as the transformation of state-owned enterprises into shareholding companies, the establishment of the capital market, the separation of A and B shares, the establishment of the ten commandments for the regulation of the China Securities Regulatory Commission, the overseas listing of Chinese enterprises, as well as reforms in the banking system, stabilizing exchange rates, commercializing housing, and securitizing mortgage loans. The current scale of the Chinese securities market also includes the wisdom and patriotic enthusiasm of Dr. Wang Kangmo. — Tu Guangshao, Vice Chairman of the China Securities Regulatory Commission
China Discussed by Overseas Scholars is a collection of essays by more than ten overseas scholars, all of whom are at the forefront of their respective academic fields. Many of their suggestions and opinions have been adopted by relevant domestic authorities. I extend my sincere gratitude to these authors—Chen Shengshen, Yang Zhenning, Lee Tsung-Dao, Wang Kangmo, and Tian Changlin—for their contributions. — Zhang Jinfu, Former Minister of the Ministry of Foreign Trade and Economic Cooperation
Kangmo possesses the qualities and potential of an academic leader. He has taught at the largest and most outstanding university in Asia and has worked on first-class financing projects in investment banking. The results he has published in authoritative academic journals have not only been recognized by the academic community but have also become a guide for governments in Asian countries seeking growth. — William Megginson, Rainbolt Distinguished Professor of Oklahoma University
The Temasek Company, in nature, is a private legal entity, not a public legal entity, but it manages state-owned capital. Its main business is the operation and management of state-owned assets, replacing the government in implementing domestic and foreign capital investment and financial management. So, how does the government, as the investor, specifically manage the enterprise and ensure its value growth? I believe the success of Temasek lies in establishing a strong and professional board of directors and implementing board governance. The ten appointed company directors are representatives of the government, acting on behalf of the government to exercise asset management functions. This approach has two advantages: First, as long as the government firmly controls the appointment of directors, it can effectively oversee the entire company. Second, the government can entrust the company to trustworthy and professionally competent directors, avoiding unnecessary expenditure of its own energy and time in the conflict between ownership and management. It is clear that although Temasek is privately operated, its underlying support comes from government authorization. The government ensures the direction of strategic development through the board of directors. How does the government prevent itself from falling from the role of "referee" to that of "player"? Temasek's guiding principle is: appoint the best business professionals, ensure decision-making transparency, and allow Temasek enterprises to operate autonomously.
If the connection between the government and Temasek is achieved through the board of directors, how does the parent company exercise its control over subsidiaries? Does the parent company intervene in the operations of subsidiaries? The answer is: Temasek represents the state in managing state-owned assets and holds controlling stakes. However, the parent company does not intervene in the operations of its subsidiaries but supervises their performance at a high level, revises corporate governance procedures and structures, and allows subsidiaries to operate autonomously within this framework. The parent company influences the business and strategic direction of its subsidiaries through shareholder rights but will never interfere in their daily operations or commercial decisions. The parent company implements property rights management through its direct subsidiaries, exercising shareholder rights, such as implementing corporate governance for subsidiaries based on shareholding levels, recommending or appointing directors and CEOs of subsidiaries, participating in profit distribution decisions, receiving dividends, providing opinions on capital changes, asset restructuring, and project investments, and exercising control. Subsidiaries must submit minutes of their board meetings to the parent company on a timely basis; subsidiaries must regularly submit monthly, half-yearly, and annual financial and management reports to the parent company; P41