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INDUSTRIAL RESPONSIBILITY: BUILDING BETTER PARTNERSHIPS FOR A POSITIVE INDUSTRIAL ENVIRONMENT

In accordance with our principle of open and mutual cooperation, we aim to build platforms and promote close relations with government and business. We also support fair competition and contribute to advanced technology while working to prevent corruption and create a positive industrial environment.

Awards and Recognitions

  • CITIC Bank was named a National Copyright Demonstration Unit by the National Copyright Bureau; several branches were evaluated as A-class banks in foreign exchange management, compliance and prudent operation of a foreign exchange business.

  • CITIC Trust was honoured as the only Integrated Trust Company of the Year at the 2020 Caijing Sustainable Development Summit and Evergreen Award Ceremony hosted by Caijing magazine.

  • CITIC Titanium, a subsidiary of CITIC Metals Group, won the Second Class Award of the State Technological Invention Award for Enhanced and Scale-up Technology of Fluidisation Process of Viscous Powder — a project conducted in partnership with the Chinese Academy of Sciences.

  • CITIC Heavy Industry won the 2019 Henan Provincial Science and Technology Progress Award for three projects, one of which was the Intelligent Key Technology of Large Mineral Grinding System and its Application project. It was also selected as one of the top ten high-end equipment manufacturers in Henan Province for its 1200t/d active lime equipment. The RXR-MC200BD firefighting and reconnaissance robot developed by CITIC Heavy Industry Kaicheng Intelligent Company won the gold medal in the China Excellent Industrial Design Award competition.

  • The Key Technology and Application of Large-Size aluminium Alloy Wheel Forming project by CITIC Dicastal won the Second Class Award at the State Science and Technology Progress Award competition.

  • CITIC Pacific Special Steel participated in a project — Development and application of key technology of green and efficient electroslag remelting for high quality special steel — that won the First Class Award of State Science and Technology Progress Award.

  • CITIC Construction was ranked 62nd on the international ENR250 list in 2020 and 13th overall among Chinese companies on the list.

  • CITIC COHC received the Four Star Award for General Aviation Safety by the Civil Aviation Administration of China (CAAC); it was the only aviation company to receive this award.

Working partnerships for mutual benefit

We recognise the importance of building relationships with the government, as this not only helps with our own development but also contributes to the local economy and society. In addition, we engage with external think tanks to support industry-university-research collaborations.

In 2020, our executives went to Yunnan, Fujian, Zhejiang, Hubei, Sichuan and other provinces and municipalities to sign strategic cooperation agreements with local governments. They also met with government officials and industry partners such as China Life, Bank of Communications and Alibaba. More than 80 online and offline meetings and talks were held to seek cooperation opportunities in various fields such as financial services, high-end manufacturing, agriculture, medical care and pensions.

We also continued to increase cooperation with external think tanks, as well as leading domestic and foreign consulting institutions, universities and research institutes, for cooperative projects in education, scientific research and development, as well as those that connect industries.

During the year, CITIC Bank held the Local Emphasis, Global Vision – CITIC Bank Cross-border E-Commerce Summit Forum. This event was attended by more than 180 participants, including financial regulators and representatives of local cross-border e-commerce associations and businesses. At the forum, CITIC Bank announced the industry’s first bank-led global collection and settlement platform for cross-border e-commerce — the CITIC Bank Remittance service platform. Through this platform, SMEs can enjoy one-stop cross-border receipt services for more efficient capital use and reduced operating costs.

On 27 April, CITIC Heavy Industry held a seminar on industrial computerized tomography. More than 20 businesses, universities, research institutes and industry leaders were invited to attend the meeting and participate in both online and offline exchanges. The participants discussed how to promote the development of an industrial CT industry that will address China’s core manufacturing challenges and technical problems.

Support for industrial development

During the year, we continued to standardise our supply chain management. We also participated in industry gatherings in order to share our management, brand, and technology approach to managing supply chains. We also maintained our commitment to fight piracy, protect intellectual property and encourage innovation.

Strengthening our supply chain management

In the process of working with our suppliers, we and our subsidiaries embed the principles of social responsibility into our corporate bidding and procurement policies, contract terms and assessment indicators. Our aim is to build a fairer and more responsible industry ecosystem.

Responsible sourcing
CITIC Heavy Industries has 3,899 qualified suppliers, including 3,666 domestic suppliers (94.02%); 1,132 suppliers in Henan Province (29.03%); and 811 suppliers in Luoyang City (20.8%).

Supply chain management
Western Australia introduced the Road Safety Chain of Responsibility in 2015, which makes clear that accidents are the responsibility not only of drivers and vehicle operators but also any other party whose acts or omissions contributed to these accidents. Every month, about 250 giant trucks transport about 4,000 tonnes of goods to the project site. To ensure the road safety chain of responsibility is legal and compliant, the project has strengthened the road transport safety management of goods and personnel entering the project site, and introduced the Cargo Preparation and Packaging Specifications to ensure that suppliers package and transport goods in a safe and compliant manner.

Promoting industry advancement

We share our experience to help solve industry-wide issues and develop industry standards. We also work to protect intellectual property rights and create a fair and equal industry environment.

Strengthening relationships with local businesses

CITIC Mining International participated in the Australian Government’s Entrepreneurship Programme in 2019. In accordance with the spirit of the programme guidelines, the company launched the CITIC Australia Supplier Development Pilot Programme in 2020 in the Pilbara region. A total of eight SMEs participated in this programme to discuss issues of engineering design, construction architecture and manufacturing. Over a 12-month period, these companies received one-on-one independent business advice by consultants, who advised them on the best way to manage their businesses. By partnering with CITIC, the companies were able to enhance their capabilities and gain opportunities to partner with different companies, which will further contribute to the economic growth of the local community.

Advancing business and technology

One of the aims of the CITIC Agriculture Yuelu Mountain Seed Industry Innovation Centre is to protect independent intellectual property rights in China’s seed industry. To that end, the company focuses on upstream seed companies with high scientific and technological content and strategic value in order to build a strong innovation platform. In addition to countering restrictions on biological breeding, this will help to ensure a national food supply, robust seed industry, better food quality and ecological safety.

As one of the first 16 pilot units to gain ISO41001 facility management certification in China, CITIC Heye was invited to speak about its application of this standard in high rise projects. This took place at the first China Facility Management Industry Summit Development Forum and the annual meeting of the National Facility Management Standardisation Technical Committee hosted by the National Facility Management Standardisation Technical Committee. CITIC Heye will continue to improve its facility management capabilities in order to build a leading facility management project in China and contribute to the development of a national standard.

Combating piracy and patent infringements

CITIC Publishing, which is part of the Beijing Edition 15 Anti-Piracy Alliance, participates in anti-piracy actions organised by the cultural law enforcement departments of provinces and cities across China. These actions include searching sales platforms for pirated goods and patent infringements. Claims are also made against stores with a large number of pirated copies or reported to law enforcement for investigation. In 2020, CITIC Publishing identified more than 50,000 piracy-related cases and completed nearly 100 validation reports.

Anti-corruption

As anti-corruption is a top priority in our internal risk management and control, CITIC and its subsidiaries continued to strengthen its efforts to combat corruption in 2020. We also increased training for our disciplinary inspectors and undertook a number of measures to maintain the company’s brand image of integrity, including centralising our on-site risk inspections and conducting company-wide training to prevent and resolve major risks. Accordingly, our subsidiaries have achieved significant results in the areas of institution building and anti-money laundering.

Creating a working environment of integrity

  • CITIC Securities has implemented a variety of measures to combat bribery and corruption, including the establishment of a sound internal control system that focuses on prevention and accountability. In 2020, its Integrity in Practice Regulations was revised to define management objectives and embed integrity into all aspects of its daily operations and business activities. Articles on regulatory developments were also published in channels such as the company intranet, e-journals and WeChat.

  • Since 2014, CITIC Trust has held an Integrity Culture Month event each year with activities such as essay writing, book recommendations and contests, all of which are designed to embed integrity into the company’s daily business.

Strengthening compliance at CITIC Securities

  • CITIC Securities is fully committed to strengthening its controls against money laundering and ensuring compliance with regulations. In 2020, the company refined its compliance management with regard to information segregation, anti-money laundering (AML) and abnormal transactions together with CITIC Securities South China. In the process of upgrading our abnormal transaction monitoring system, we have built a customer money laundering risk assessment system, reviewed the central control room migration plan and developed migration plans and other initiatives to prevent various risks arising from information segregation, employee practices, conflicts of interest, money laundering and unusual transactions.

Anti-money laundering at CITIC Bank

  • CITIC Bank optimised its anti-money laundering risk management system by introducing a dual review mechanism covering business and technology. These involved enhancing or reforming system functions and carrying out additional AML audits of new products, businesses and business channels. More than 350 AML audits were conducted during the year, and over 1,400 AML audit opinions recorded. The company also improved the quality of its reports on suspicious transactions. As of the end of 2020, a total of 254 suspicious transaction reports were handed over to the local People’s Bank, of which 115 were handed over by the People’s Bank to other regulatory authorities and 18 were filed.

  • At CITIC Securities, self-assessments of money laundering risks continued during the year. These included assessments of inherent risks and the effectiveness of the company’s money laundering risk control measures. As a result, CITIC Securities is able to evaluate its money laundering risks objectively and fulfil its anti-money laundering obligations. The company also reviewed, upgraded, and optimised its systems for monitoring suspicious AML cases.