INDUSTRIAL RESPONSIBILITY: BUILDING PARTNERSHIPS FOR BETTER DEVELOPMENT
We believe working with our business partners should be mutual beneficial and will bring the greatest results. While enjoying the support and help of our partners, we do our best to fulfil industrial responsibilities by building cooperative platforms and promoting close cooperation between the government and enterprises to create mutually rewarding partnerships. We support fair competition, contribute to advanced technology and promote healthy industrial development. At the same time, we take a multi-pronged approach to prevent corruption and create a positive industrial environment.
Awards and Recognitions
- CITIC Bank was selected as “Custodian Bank of the Year (Shareholding Bank)” by Asian Banker. The Company also won the “Best Spot Market Maker Award” (the fourth item) from the China Foreign Exchange Trading Center and the “Best Treasury” Award from the US Dollar Debt Project; Baixin Bank, a subsidiary of CITIC Bank, was awarded “National High-tech Enterprise” – the first state-controlled bank to receive this award.
- CITIC Securities received the “Best Investment Bank (Asia), the Best Green Financial Services Broker (Asia)” [the Sixth Grand Award] at the Asian Finance 2019; CITIC Securities and CITIC- CLSA received special awards – “Best for Overall Research” and “Best Local Brokerage”, Asia- Pacific Region, at the 30th anniversary of Asia Money.
- CITIC Trust received “Excellent the ABS Issuer Award” from the “2018 China Bond Outstanding Member Annual Selection Activity” and “Sustainable Development Risk Control Award” by Finance Magazine. The Company once again received “China Trust Company of the Year” from Asian Banker, the only one in the industry.
- CITIC Heavy Industries was awarded “China’s Intelligent Special Robot – the Industry’s First Echelon Representative Enterprise” by the Ministry of Industry and Information Technology for the third consecutive year.
- CITIC Dicastal was ranked 65th amongst the top 100 global auto parts suppliers; the Engineering Technology Research Institute has been approved as a national industrial design centre.
- CITIC Construction was ranked 54th in the United States’ “Engineering News Record (ENR) 2019 Top 250 International Contractors” and was ranked 12th amongst the 75 Chinese corporates on this list. “Belarus Geely Auto Production Line Project won the “China Construction Engineering Luban Award”.
- CITIC Engineering won 35 national awards for its outstanding engineering survey and design industry in 2019.
- CITIC Telecom International (Information Technology) Company Limited won the “2019 Best Practice Award-Innovation and Leadership in Competitive Strategy for Asian Pacific Cloud Management Services” from Frost & Sullivan.
Working partnerships for mutual benefit
We recognise the importance of building relationships with the government, while promoting our own development and contributing to local economic and social development. We are guided by the notion of “even if we are not an industry leader, we will cooperate with the industry leader". Therefore, we engage with other high-quality companies and external think tanks to support the construction of the industry-university- research platform.
Enhancing cooperation between the Government and Enterprises
In 2019, the senior management had hundreds of meetings with the government and corporate partners, and visited Japan, the Czech Republic, Israel and other countries and regions to seek cooperation opportunities in various fields, including financial services, high- end manufacturing, elderly-care and modern agriculture.
Supporting research and innovation
We continued to strengthen our cooperation with external think tanks and contacted with innovative organisations, such as leading consulting institutions at home and abroad, famous universities and research institutes. We sought close cooperation with them through education, research and development, innovation projects and industry integration.
We donated RMB3 million to the Central University of Finance and Economics and China Pubic Private Partnership Centre to support research and to promote national PPP theory into practice. This cooperation aims to put national PPP theory into practice, and to study the financial and legal aspects of PPP theory into practice, and to study the finance and law aspects of the PPP theory to promote implementation, industry standards, talent training and international exchanges.
CITIC Trust signed a strategic cooperation agreement with the National University of Science and Technology and Weiqiao Venture to jointly build an innovation research institute. This cooperation aims to create an open scientific research platform to put scientific research results into practice, integrate global resources, and play a guiding and demonstrative role in the development of emerging technologies as well as explore industry-university-research cooperation mechanisms.
Promoting healthy industry development
While demonstrating our social responsibility, we promote what we believe to our upstream and downstream supply chain and share our standards and requirements with them. We manage our supply chain carefully, and effectively prevent supply chain risks. We also participate in industry organisations to share our management, brand, and technology approach to help the industry to progress and develop. In addition, we fight against piracy, protect intellectual properties and encourage innovation with practical action.
Strengthening supply chain management
In the process of working with our suppliers, we and our subsidiaries always embed the principles of social responsibility into our corporate bidding and procurement policies, contract terms and assessment indicators. We have also worked with our partners to build a fairer and more responsible industry ecosystem.
- To better support suppliers in remote areas, CITIC Mining International participated in the “Entrepreneur Project” initiated by the Australian Government. This project is led by the Commonwealth Department of Industry, Science and Innovation, which aims to enhance the competitiveness of Pilbara and Western Australian companies through cooperation with mining companies, including CITIC Mining International. Currently, 11 local mining companies are cooperating with CITIC Mining International. Through long-term cooperation with multinational companies such as CITIC, these companies can enhance their business experience and capabilities as well as gain opportunities to cooperate with more companies, thereby further promoting the economic growth of local communities.
- CITIC Heavy Industries organised a global supplier conference of appreciation under the theme of “Heading to the World and Creating the Future Together”. A total of 81 guests attended the conference, including suppliers, high-end customers, university leaders and expert teams. The Company reviewed the experience of working with them and showed its appreciation to some quality suppliers. At the Conference, the Company also signed a "2020 strategic cooperation agreement” with 12 suppliers. This was the second time that CITIC Heavy Industries held conferences on such a large scale with the aim to work with global partners to ultimately build a high-quality global supply chain system.
Supply Chain Management
- CITIC Bank’s first “blockchain + supply chain” pilot innovation project was under way during the year. This allows traceability of each transaction, improves the transparency of supply chain data, reduces the risk of false financing and effectively improves the credibility of the supply chain trade. This project uses blockchain as a trusted information transmission and collaboration platform so that the financing process can be traced and monitored with quantifiable data. At the same time, by making use of smart contracts all related financial data and information can be integrated, authenticated and circulated automatically. All transactions by core enterprises, financing platforms and banks are permanently recorded and shared, forming an unbreakable chain of trust, to ensure real-time synchronisation and efficient collaboration through the supply chain financing processes. CITIC Bank will further enhance “the blockchain + supply chain” financial innovation to create greater value for our customers, and promote a new and open supply chain ecosystem.
- CITIC Wutong Port Supply Chain Management, a subsidiary of CITIC Metal won the second prize of “National Enterprise Management Modernisation Innovation” for its Digital Material-Based Bulk Material Supply Chain Financial Service.
Promoting industry advancement
We make use of our advantage to explore innovative business and management models so that we can share our experience with the industry for further development. We are committed to promoting industry development by participating in major national projects, solving industry issues and developing industry standards. We also organise/co-organise/participate in various industry forums and exchange activities and act as the Chairman and Vice-chairman of various industry associations.
Innovative business management
- CITIC Securities cooperated with the China Securities Regulatory Commission and China Securities Depository and Clearing Corporation to promote the “full circulation” pilot business of H shares. This aim of this project is to solve the prolonged problems of H share market equity structure, share circulation, market value management and other mechanisms. At the same time, it allows the exploration of a new capital market foreign exchange management model, to further consolidate the foundation for the long-term development of the Hong Kong securities market and H-share listed companies.
Promote operational and technological advancement
- Since 2017, CITIC Trust has been conducting in-depth research on the service trust business. In 2019, CITIC Trust stood out from the six bidding corporates at the “China Trust Industry Association – 2019 Trust Industry Thematic Research Project Bidding and Review Meeting” and became the leading corporate in “Trust Service Business Research” of the trust industry thematic research project 2019.
- CITIC Heavy Industries led a key national research and development plan called “Key Technology Research and Application Verification of Hydraulic Heavy-Duty Manipulators”. The prototype was tested and the data will be used to support the next simulation analysis, subsequent design improvement, and system optimisation. “Smart Robots” is one of the 16 key projects established by the Ministry of Science and Technology. It represents the highest level of scientific research in the field of industrial heavy-duty robots.
Enhance industry communication
- CITIC Construction attended the first China-Italy Third-Party Market Cooperation Forum, moderated a parallel session on infrastructure and transportation, and made a keynote speech entitled “Working with Third-Party Markets to Inspire New Momentums in Cooperation”. The forum was hosted by the Italian Ministry of Economic Development and the National Development and Reform Commission of China. It is one of the important series of activities during the visit of President Xi Jinping to Italy. Hundreds of representative companies and financial institutions from various industries in China and Italy participated in the forum, which vigorously promoted economic and trading exchange, cooperation and development between the two countries.
- CITIC Heavy Industries showcased more than 10 special robots at the World Robot Conference 2019, which featured fire protection, inspection, underwater and military and security robots. It not only showed the latest technological achievements of special robots, but also expanded the Company’s image as a smart brand.
- CITIC Envirotech cooperated with the E20 platform. Through this platform, the Company co-sponsored the Shanghai Water Industry Hotspot Forum and Shanghai Solid Waste Hotspot Forum. The Company made keynote speeches in several sub-forums, showing the latest findings and development of CITIC Environmental Technology. In addition, we were invited by the “Macao International Environmental Cooperation and Development Forum and Exhibition (MIECF)” as a special exhibitor for three consecutive years. At which, CITIC Environmental Technology demonstrated its technological advantages in the environmental field, including membrane equipment, membrane technology applications, large municipal sewage treatment, industrial wastewater treatment, hazardous and solid waste treatment, river basin treatment and circular economy industrial park. In addition to technical information, the Company showcased its business results, integrated capabilities and brand influence, which will help the development of the Green Greater Bay Area.
Safeguarding intellectual property
CITIC Pacific Special Steel pre-assesses patent related matters, such as patent application, maintenance and management, as well as exclusive technology validation and intellectual property disputes. To have our core technologies have patented, we strive to standardise our products and processes in order to achieve international standards for our patented technologies and for us to own independent intellectual property rights. Through layer-by-layer protection, the Company is able to ensure that core technologies will not be infringed, laying a solid foundation for further research and development and marketing.
CITIC Publishing passed the bid evaluation and hired a professional rights protection company to combat infringement and piracy. The Company also cooperated with the provincial and municipal cultural law enforcement departments to combat infringement and piracy and achieved significant results. After nearly a year of hard work, the sales of pirated books on the online book sales platform have decreased significantly and pirating best-selling books has been significantly reduced.
We always regard anti-corruption as a our top priority in our internal risk management and control. In 2019, we and our subsidiaries continued to improve our disciplinary body by responsibilities adjustment, staffing and strengthening our inspection work force. We also promoted work standardisation, increased the training of our disciplinary inspectors, and took multiple measures to maintain the Company’s brand image of integrity and a sound industrial environment. In addition, we centralised on-site risk inspections for all our major companies, while carrying out company-wide risk management training under the theme of “adhering to the bottom line and focusing on preventing and resolving major risks”. We also included content around new trends in financial management, company supervision and management. Our subsidiaries have also achieved significant results in the areas of institution building and anti-money laundering.
Optimising rules and regulations
- CITIC Securities established an integrity work system and revised the Regulations on the Integrity of CITIC Securities Co., Ltd. and the Measures for Rewarding and Punishing Employees of CITIC Securities Co., Ltd. This further improved the organisational structure and clarified the management and work responsibilities of relevant departments and entities. A comprehensive mechanism was thus formed to cover all business processes, including preventive, ongoing and rectified measures. We also embed integrity risk management into our daily operations and business activities. At the same time, the Company has established a database to record integrity practices, and incorporated the integrity practices into employee performance assessments and personnel management of all departments.
- CITIC Resources Karazhanbas Project Company developed the “Karazhanbas Petroleum Corporation’s Anti-Corruption Regulations”. The regulations were developed in accordance with Kazakhstan’s “Anti-Corruption Law” and the Company’s Constitutions to regulate the behaviour of employees and internal business departments in communicating with state agencies and external companies. We are committed to forming a company culture with zero tolerance for corruption and maintaining an transparent and clean corporate image.
- CITIC Bank has built a team of anti-money laundering experts to strengthen the anti- money laundering internal control systems and perform five major works, including combating money laundering and terrorist financing transactions, monitoring and managing customer identity information, conducting product business money laundering risk assessment, as well as strengthening anti-money laundering management for sanctioned countries. In 2019, CITIC Bank continued to strengthen its anti-money laundering work management and organised anti-money laundering video training sessions for operating staff. All staff of the head office’s operation management department were required to participate in the training. More than 7,000 people including 38 branch managers and related staff participated. We are very proud to see that our work in anti-money laundering is recognised with many branches obtaining Grade “A” in anti-money laundering regulations. Because of this, the Head of the Business Department of CITIC Bank was invited to share their experience in anti-money laundering risk control management at the 2019 working conference of the Business Management Department of the People’s Bank of China.
- CITIC Trust held anti-money laundering special compliance training, covering anti- money laundering laws and regulations and regulatory requirements as well as the responsibilities of various departments and anti-money laundering information officers. The training used business cases, such as customer identification, Customer identification and transaction records and reporting suspicious transactions to explain core knowledge points and discuss the issues in detail. The training enhanced the professional knowledge of our staff and strengthened their sense of responsibility. This laid a good foundation for further improving the quality and effectiveness of the Company’s anti-money laundering work.