The Management System Of State Owned Enterprises In HongKong

State owned enterprises in Hongkong play an important role in economic boom and cooperation for mainland China and Hongkong. Yuehai (Group) Co., Ltd was founded in Hongkong in 1980's by Guangdong Province government, as the representative of "Window Corporation". This paper aims to analyze the management system of Yuehai in detail by case study, from two perspectives: government function transition and management system innovation. By summarizing the experience and lessons of Yuehai' history, this paper may provide some advice for the management of state owned multinternational enterprises, as well as the monitoring of state owned capital abroad for the government.This paper includes three parts: (1) Firstly, this paper will introduce the development history of state owned enterprises in Hongkong; (2) Secondly, this paper will describe the history of Yuehai in detail, including its birth, development, frustration, and reform etc.; (3) In the end, this paper will summarize the experience and lessons of Yuehai, and provide some advice for our government and state owned enterprises in Hongkong, including how to transform the government function and how to innovate the operation system(e.g. corporate governess, financing, operation, managers monitoring and so on).By the case of Yuehai, this paper draws on some conclusions as following: The development of Yuehai in the earth due to the innovation of management system. Its growth history indicates that "Window Credit Era" has gone away. The failure of state enterprises is not only due to the corporation system, but also due to the operation system. It's necessary for State owned enterprises in Hongkong to conduct innovation and build modern enterprise system.