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Shirley Yam

At last, Hong Kong Exchanges and Clearing is to have an investment banker as its chief executive. 
In fulfilling this role, Charles Li Xiaojia's legacy may depend not on his much talked about mainland connections but whether he can turn the culture of the exchange from that of a semi-monopoly into a proactive commercial company. This will not be easy. 
Rarely is an exchange's success so vital to a state's economic well-being, with a shareholder-cum-government that is always watching.
Rarely does an exchange have a client that can mean life and death to its business yet at the same time is its rival. 
Rarely is an exchange asked to maximise profit for its shareholders yet at the same time play a heavy regulatory role.
Failing  in any of these delicate balances can be fatal for a career. Matters are made worse for Mr Li in that he inherits a company that has enjoyed tremendous success, thanks to the China story and leadership of veteran regulators and civil servants for almost two decades.
It should be noted that most of the exchange's chief executives have done a decent job in leading it through many challenges.  
But times have changed. It is no coincidence lately that major bourses worldwide have been putting Wall Street animals at the helm. The exchange business is no longer a club of monopolies but one of tooth-and-nail battles. Hong Kong needs a more proactive exchange and leadership.
For those in doubt, just look at the exchange's relationship with Beijing - something that no serious corporate will ignore these days.
The ties used to be very close. Exchange officials and other Hong Kong regulators played backroom lieutenants in the drafting of the mainland's securities-related rules. Problems were solved with quick phone calls.
Not any more. At the top, the last meeting between  HKEx chairman Ronald Arculli and the chairman of the China Securities Regulatory Commission was in early 2008. 
On the working level, mainland regulators barely speak to those in the HKEx listing division. 
'Quarrels were not unheard of,' said an insider. 
Almost six months since the appointment of a new listing head, no courtesy visit to Beijing has been arranged for him.
Instead, the handling of the 'mainland relationship' rests with Lawrence Fok Kwong-man, the head of business development and investor services, 'at Beijing's request'. When a  regulator's officials choose to talk to a marketing man instead of their peers, it is really bad.
The arrival of Mr Li will certainly make a difference, given his mainland upbringing and more than 15 years' experience in courting mainland regulators and corporates as the China head of JP Morgan. 
But a well-connected chief executive is not the sole solution to the sharp deterioration of the exchange's Beijing ties since the retirement of its long-serving chairman, Charles Lee Yeh-kwong, whose connections went as high as the premier. 
We need to fix the system. 
Some blame the 'insurmountable' cultural and language barriers with Beijing officials, given that most of the HKEx management either are non-Chinese or speak no  Putonghua. 
While I will not underestimate these barriers, I consider complacency and the monopoly culture the real culprits. The exchange is complacent in the sense that it is not aware of the fundamental change that has happened on the mainland since the signing of their first accord in 1993 - the unloved frog has turned into a prince.
While successful companies treat the mainland as a big client by studying its policies, anticipating its needs and offering solutions,  HKEx sticks to the professor-and-student model that has been largely unchanged in the past 15 years. 
This includes having a mainland relations officer,  occasional formal meetings at the top, issue-oriented discussions at the working level and the secondment of mainland regulators to the HKEx. 
Complacency is hard to avoid when you are one of the most profitable exchanges in the world, but these are very challenging times.
To make sure Hong Kong continues to be important to the mainland and a genuine international capital market, Mr Li has to encourage a sense of competition. It is about a cultural revolution, not just making more calls to Beijing.
This won't be easy. Yet my hopes for Mr Li remain high. Here is a guy who came from an ordinary Beijing family, began as an oil-drilling worker, learned his English listening to the radio, was among the early batch of post-Cultural Revolution graduates and then became a reporter on the English-language China Daily.
He and his wife became the first to receive overseas scholarships to the University of Alabama after saying in the application letter: 'Reply unnecessary if application fee is needed.' 
He washed dishes to earn money while doing a master's degree in journalism and declined an offer from  Columbia University because he  could not afford to go.
However, he ended up with a full scholarship and a juris doctor from Columbia and, after an impressive debate on press freedom during a school exercise,  was hired by a major United States law firm.  The rest is history.
This is not a man who will bow out easily. He said he had taken the job because 'this is a platform that will test all the things that I have learned.'
Charles Li is in fighting mode.



Charles Li the right man for the battles ahead