China Southern Airlines on Saturday announced the start of its equity diversification reform, bringing in state-owned capital worth 30 billion yuan ($4.36 billion) from South China's Guangdong Province. 

A Chinese industry expert said that the move represents a milestone in deepening state-owned enterprise (SOE) reform in China and this kind of cooperation will gain momentum in the second half of the year.

The reform provides a model of cooperation between an SOE and a local government in China, Hao Peng, secretary of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) Party Committee and chairman of SASAC, said at a signing ceremony in Beijing.

It will help improve the corporate governance structure of the Guangdong-based airline company and nurture it into a leading world company, Hao said.

The reform will further boost Guangdong's economic growth and expand the province's opening-up, according to industry insiders.

China Southern Airlines said the new funds will be primarily applied to the air transport business, aiming to serve the construction of the China-proposed Belt and Road Initiative (BRI) and facilitate the development of the Guangdong-Hong Kong-Macao Greater Bay Area.

As one of China's major airlines, the company said it will strive to grasp opportunities during the growth of the Greater Bay Area and provide world-class solutions to the local aviation industry.

Cooperating with local state-owned capital will be conducive for SOEs to form a complete industry chain and help them focus more on their primary business, Li Jin, chief researcher at the China Enterprise Research Institute, told the Global Times on Sunday.

The cooperation will inject growth impetus into local SOEs and further prompt them to pursue innovative and sustainable development in the future, Li told the Global Times, noting that "such trends will continue and intensify later this year."

The Chinese civil aviation sector will deepen reform in the second half of 2019 to improve the efficiency of civil aviation resource allocation, lower the operating costs of domestic airlines and enhance their risk-resistance capacity, Chinese news site jiemian.com reported on Sunday, citing Feng Zhenglin, head of the Civil Aviation Administration of China.