Industry Development:
We are working with government to promote the development of industry

We seek to deepen collaboration among government and businesses by promoting strong alliances and expanding the industry’s “circle of friends” to achieve mutual benefit. We comply fully with the Anti-Unfair Competition Law of the People’s Republic of China in support of the industry’s healthy development.

Awards and Recognitions

CITIC Bank was ranked 16th in the Top 500 Global Banking Brands list published by The Banker magazine.

CITIC Trust received the Best Overall Trust Company Award by Financial Magazine.

CITIC Heavy Industry’s innovative case, Digital Construction Based on the Industrial Internet, was selected as one of the National Innovative Cases of Intelligent Enterprise Construction in 2021.

The third waste-to-energy project in Chongqing built by Sanfeng Environment, a subsidiary of CITIC Environment, won the National Quality Engineering Award.

CITIC Telecom International’s DataHOUSE™ AR Clairvoyance Service won the Excellence in Innovation Award at the Data Cloud Global Awards.

Longping Hi-Tech, a subsidiary of CITIC Agriculture, was nominated for the China Quality Award.

Partnering for Mutual Benefit

We attach great importance to our relationship with the government and our industry partners. We are also committed to making positive contributions to the local economy and social development, as well as to the development of industry.

In 2021 the Group’s senior management held meetings with its partners and visited Sichuan, Guangdong, Qinghai and Hunan provinces to sign strategic cooperation agreements with nine provincial and municipal governments and 13 companies. Additionally, we met with our overseas counterparts to seek partnership opportunities in various areas, such as financial services, high-end manufacturing, medical care and elderly care, as well as modern agriculture.

We also continued to strengthen cooperation with external think tanks and have connected with domestic and international consultancies, universities and research institutes in order to carry out in-depth cooperation in education, research and development, and the alignment of innovative projects with industry.

Promoting the Healthy Development of Industry

In addition to fulfilling our social responsibilities, we manage the upstream and downstream ends of our supply chain and work with industry associations to promote our management, brands and technology. Additionally, we combat piracy and copyright infringement to protect intellectual property and encourage innovation.

Strengthening Supply Chain Management

In accordance with Law of the PRC on Tenders and Bids and relevant regulations, we formulated Group’s Purchasing Management Measure. In the process of working with our suppliers, we and our subsidiaries have embedded social responsibility principles into our corporate tendering and procurement policies, contract terms and assessment indicators. Our aim is to work together with our partners to build a fairer, more responsible industry ecosystem. As of the end of 2021, the headquarter of CITIC accredited 94 suppliers, among which 80 are domestic and 14 are overseas, taking up 85.11% and 14.89% respectively.

CITIC Limited upholds the principle of strict access, quantifiable rating, dynamic adjustment and mutually beneficial partnership in finding, introduction, selection, assessment and termination of suppliers; centralised the establishment, renewal, use and management of suppliers database and supervise the agency companies to comply with relevant regulations; set up a blacklist of suppliers with misconducts, including bribery, malicious bidding, falsification or being penalized or delicensed by regulators for their violations of laws.

CITIC Bank requires suppliers to provide ESG related content in their application files and invited consulting firm to review 521 suppliers to identify their environmental and social responsibility related risks, including compliance, social responsibility, material change and legal risk. Review feedbacks are in turn incorporated in supplier’s assessment to encourage them delivering their ESG commitment.

CITIC Securities set up assessment system to conduct regular review of its suppliers in terms of product quality, service, sustainability, reputation and agreement delivery capacity to select the premium ones; built a termination mechanism to optimize the suppliers pool; uphold and advocate the principle of integrity and honesty to guard against any bribery and bidding collusion.

China Securities embedded ESG concept in the whole process of purchasing and encourages its suppliers to improve their ESG performance and conducts due diligence vie public source or by third party to follow its suppliers’ recent public opinion to fend off potential risks; requires new suppliers signing a Commitment Letter to reinforce their commitment to fighting against forced labour and to environment protection.

CITIC Dicastal manages its suppliers in accordance with its supplier approval procedures. Monthly performance assessments are conducted on first-tier suppliers based on quality, cost, delivery and service. The Company selects the best and eliminates the worst according to their performance reviews.

CITIC Special Steel regularly visits suppliers and communicates its philosophy to promote mutual growth and progress. The Company monitors and evaluates the compliance of its suppliers through on-site assessments and recommends timely preventive and improvement measures against potential risks. Suppliers who fail to meet the safety, quality, environmental and social responsibility requirements will be suspended or terminated.

Promoting Industry Excellence

We explore business and management models to provide reliable guidance for the development of the industry. We also participate in major national projects, discuss industry issues and set standards through our participation in industry forums and exchange activities. Our objective is to protect intellectual property rights and create a fair and equal industry environment.

  • Promoting Business and Technological Progress
    CITIC Engineering participated in the establishment of the Wuhan Design Capital Promotion Centre – Digital Construction Industry Alliance, which promotes the BIM achievements of the Ministry of Industry and Information Technology of China. Alliance members work together to build a framework for the development of the service industry and to create an autonomous BIM ecosystem. The Company takes advantage of its upstream and downstream resources, as well as the scale of construction in China, to bring more enterprises into pilot tests. This enables companies to digitalise rapidly, gather intelligence for pre-project planning, procurement and subcontracting, and learn best practices in construction and installation, completion and delivery, and post- operations.

Longping Hi-Tech, a subsidiary of CITIC Agriculture, participated in the first Yuelu Farming Summit during the year. At this event, we worked with several government organisations, such as the China Rural Technology Development Centre of the Ministry of Science and Technology, to discuss the implementation of the National Agricultural Revitalisation Initiative. The objective of the Summit is to accelerate the implementation of the government’s agricultural strategy and promote the development of the modern farming industry.

  • Protecting Intellectual Property Rights
    We developed the Intellectual Property Rights Management Regulations in accordance with the Civil Code, the Trademark Law, the Copyright Law, the Patent Law and other related laws and regulations, to protect patents, trademarks, processes, technical know-how and logos.

CITIC Press has stepped up its efforts to combat copyright infringement and piracy by participating in the activities of organisations such as the Beijing Copyright 15 – Anti-Piracy Alliance. An evaluation report on suspected pirated books purchased by readers was also published. We will collect evidence, obtain notarisations and initiate legal proceedings against infringing shops and pursue criminal liability charges in cases involving 3,000 or more copies of pirated or copyright infringing books. In 2021 more than 150 books were found to be pirated. Two criminal cases were filed, and more than 20 suspects detained for copyright infringement and piracy. Thirteen shops were charged, and US$10 million seized. Six warehouses were investigated, and more than 24,000 copies of infringing or pirated books worth RMB1.45 million were seized.

When counterfeit auto parts were detected in the market, CITIC Dicastal worked with the Public Security Bureau to confiscate the products and shut down the infringing businesses, while recovering financial losses for consumers. While we are committed to defending our rights, we also give small businesses an opportunity to avoid being held responsible for minor infringements. We not only encourage entrepreneurship and innovation but also work to protect intellectual property rights through a combination of punishment and education.

CITIC Pacific Special Steel has developed a Patent Management System, Intangible Assets Management System, Patent Incentive System and Trademark Management Regulations. It also provides training in intellectual property rights to protect the Company’s innovations.

Anti-corruption

Anti-corruption is a top priority for the Group and an integral part of our internal risk management. In addition to fully complying with the Anti-Corruption Law of the People’s Republic of China, we have adopted a multi-pronged approach to combat corruption in the industry. CITIC Securities revised its Regulations on the Integrity of CITIC Securities Company Limited in accordance with the Implementation Rules for the Integrity of Securities Operators and their Personnel of the China Securities Association and the Code of Ethics for Securities Practitioners. It also developed the Implementation Rules for Anti-Money Laundering Customer Identification and Risk Management, Large Transaction and Suspicious Transaction Reporting and Business Money Laundering Risk Assessment, in accordance with the Anti- Money Laundering Law of the People’s Republic of China. China Securities developed the Rules on the Integrity of China Securities and its Personnel in Practice, while CITIC-Prudential Life developed an Anti-Commercial Bribery System and Anti-Money Laundering Management Policy as well as other internal control systems to create an ethical industry environment.

We continued to improve the functions and staffing of the disciplinary and inspection bodies of the Company and its major companies during the year. We also exchanged views with the disciplinary committee secretaries of nine subsidiary companies to improve our disciplinary work. We are committed to standardising our disciplinary work, increasing training for our staff and safeguarding our brand image of integrity and honesty. In addition, we have established a comprehensive risk management system and made significant efforts in the areas of system building and anti-money laundering.

We attach great importance to anti-corruption training for our directors and staff and circulated notice about cases of violating laws and regulations and dereliction of duty and negligence of responsibility. By learning from these cases, we formulated correction measures. Our subsidiaries organised seminars to learn and reflect from these cases to improve accountability, to guard against power abuse and to enhance supervision.

  • Creating an Ethical Workplace

    CITIC Securities provided a series of online courses on integrity in its induction training for new staff, as well as compliance officer training and refresher training for staff and a full coverage training of anti-corruption with a total number of 21,200 staff attending. A designated hotline and email address were set up for reporting ethical concerns. Upon receipt of a report, verification and handling work will be carried out in a timely manner, with confidentiality for whistle blowers strictly enforced.

    China Securities is committed to improving its risk management system and monitors the integrity of its practices through audits, compliance inspections and internal inspections organised 146 trainings for integrity of practices, with a total number of 88,500 staff attending. A complaint and reporting mechanism has also been established to encourage employees, suppliers and other stakeholders to report any irregularities.

    CITIC Bank implemented zero-tolerance policy to corruption to forestall any new case; organised 4 all hands meetings to notify and to warn against corruption; organised 4 rounds of anticorruption trainings to raise our staff’s awareness and to uphold honesty, with a total number of 10,000 staff and 8 board directors attending.

 
  • Strengthening Compliance Management
    CITIC Bank implemented a comprehensive clean-up of its rules and regulations, prohibiting 675 items of branch rules and regulations. The Bank instructed branches to review their existing rules and regulations on a case-by- case basis. A clean-up plan was also implemented to remove and amend 2,931 rules and 534 regulations.

CITIC Securities launched a special project to strengthen its management. The Company also reviewed the business and functions of each department through a self-examination-review-correction process to improve business systems and operational procedures. Over 1,000 systems and operational guidelines were reviewed and streamlined, enhancing its internal control management and compliance capabilities.

  • Anti-money laundering
    CITIC Bank followed up on new regulatory requirements by strengthening its internal control. The Company has progressively improved its anti-money laundering system of the top-level system+ specialised system + line system. A database of internal and external anti-money laundering regulations was developed with four major anti-money laundering systems revised and three new specialised anti-money laundering systems added.

CITIC Securities released the Anti-Money Laundering Enhanced Due Diligence Workbook for High Risk Customers to refine the due diligence requirements for high-risk customers. Our business departments are required to conduct comprehensive investigations, including identity verification, source of funds and transaction analysis, when conducting due diligence on high-risk customers.

China Securities incorporates its anti-money laundering responsibilities into its staff performance appraisals. Departments and branches with unsatisfactory performance will be penalised, which in turn will affect salary adjustments.

  • Protection of the legal rights of the informers
    Supervisory bodies at all levels in the Company, acting in strict accordance with Rules for Handling Reports and Accusations at Inspection Organizations, should keep confidential the informers’ name, address, phone number and personal information of their relatives; should not copy or excerpt the content from the report and must not pass the report to the department or to the person accused.