Upgrade CMEC and Try All Out to “Create another SINOMACH Overseas”A special interview with CMEC Chairman Zhang Chun

Release time:2019-01-31 Article source:亚太聚焦 Reading times: A+AA-
As China's first industrial trade company and one of the central enterprises that are involved in the “go global” strategy, China Machinery Engineering Corporation (CMEC) took the lead in expanding its business presence along the “Belt and Road” and building its good image. CMEC had a special status and had made brilliant achievements in the history of China’s medical industry and foreign economic & trade development. Recently, CMEC Chairman Zhang Chun has accepted an interview to talk about the history and future of CMEC, unfolding a blueprint for CMEC’s development in the new era.
Forge ahead against the backdrop of the 40 years of reform and opening up
In the history of China, 1978 is undoubtedly an eventful year. In the year, the Third Plenary Session of the 11th CPC Central Committee was convened, symbolizing that China had officially embarked on its journey toward the reform and opening up. In the year, “China National Machinery & Equipment Import & Export Corporation”, the predecessor of CMEC, was officially established, bringing China, which was in a state of destitution at the early stage of reform and opening up, lots of advanced technologies and equipments of power generation, metallurgy, mining, machine tool, and industrial process control, etc. from overseas.
“The earliest 300MW and 600MW thermal generator sets and some important equipments of Baosteel were imported by CMEC. Meanwhile, we exported some homemade mechanical and electrical products, for example, we for the first time exported China’s 210,000-line program-controlled switch to Bangladesh, undertook the construction of large hydropower stations with four 30MW units in the Republic of Congo, and the construction of the float glass factory with a daily melting amount of 500 tons in Indonesia,” said Zhang Chun proudly.
What behind the achievements are the efforts made by CMEC in the process of China’s reform and opening up. CMEC has now turned itself from an equipment import & export trader to a comprehensive trade service provider. “Over the past 40 years, we have operated globally, built power stations, paved roads and set up bridges, carried out projects for improving people’s livelihood, and bring benefits to the people around the world. CMEC actively explores integration between industry and trade, import and export, and technology and trade, and carries out trade and service business through the marketing network in over 150 countries and regions. CMEC undertakes projects in nearly 50 countries and regions, takes the lead in exporting China’s power generating equipments in Asian, African, European and American markets, and maintains a leading position in China in the field of electric power construction. It has developed a large number of excellent projects that are renowned both at home and abroad and set up a bridge of friendship between China and foreign countries. The aerial view of the Puttalam Coal-fired Power Plant, which was built by CMEC, has been for the first time printed on the front side of the new 100-rupee banknote of Sri Lanka, making contributions to the efforts made by China’s mechanical industry for keeping aligned with the overseas markets and developing its international competitiveness”.
Zhang Chun said, the rapid development of CMEC in the past 40 years benefits from the policies of reform and opening up, the upgrading of Chinese mechanical equipment and products in quality and performance, the improvement of engineering construction and China’s support to the “go global” strategy, as well as internal system building, talent strategy, upholding the leadership of the Party, and the boldness in innovation. “We have been adhering to invigorating CMEC through carrying out the strategy of developing a quality workforce, have developed key management and cultural systems covering project contracting, commerce, investment & financing, and law, encouraged the employees to make innovations in accordance with national policies and the actual situation of the market, established a corresponding fault-tolerant mechanism, created a flexible environment for innovators, and stimulated the creativity of the employees. The above measures have delivered very good results and ensured that CMEC can make profits on a sustained basis”.
Write a new chapter of coordinated development of “SINOMACH”
The year of 1997 is also memorable in the history of China’s reform and opening up. In the year, a financial crisis broke out in Asia, the reform of state-owned enterprises was highlighted in China’s economic structural reform, and the government decided to take administrative measures to carry out reform of state-owned enterprises and cut overcapacity. In the year, the former Ministry of Machinery Industry established SINOMACH on the basis of its 26 industrial trade companies including CMEC and began to explore the integration of the innovation chain, industry chain and capital chain. Through the development and reorganization of business segments, CMEC was successfully listed on the Hong Kong Stock Exchange, incorporated China Machinery International Engineering Design & Research Co., Ltd., China Jikan Research Institute of Engineering Investigations and Design Co., Ltd., China National Electric Engineering Corporation and China National Complete Engineering Corporation through mergers and acquisitions, hosted Harbin Power System Engineering and Research Institute Co., Ltd., developed a platform and a new business management model for strategic cooperation between China and foreign countries, and took a path of development with unique characteristics.  
“SINOMACH plays a strong role in the guidance of the entire strategy of CMEC. Especially, it ensures business development by relying on the mechanical industry. The internal coordinated development of scientific research institutions, equipment manufacturers and construction organizations within SINOMACH provides CMEC with a platform of synergy and gives a strong boost to CMEC for it to maintain a leading position in the industry. Meanwhile, SINOMACH has overcome lots of difficulties that CMEC faces in getting listed and established a scientific management system covering risk prevention and control, thereby laying a solid foundation for CMEC to gain its business reputation and ensure positive development in the future,” said Zhang Chun.
Under the backdrop of coordinated development, CMEC achieved steady performance in spite of various adverse factors. Since 2014, CMEC’s annual profits have remained above RMB2.7 billion, the operating revenue remained above RMB20 billion, the uncompleted contract amount stood at about USD8 billion, the newly signed contract amount set new record highs, the average return rate of total assets reached 7.22%, much higher than 3.26%, the average level of similar enterprises. “As the flagship company of SINOMACH for the ‘go global’ strategy, CMEC will spare no effort to achieve its development, cooperate with other companies in SINOMACH, and achieve the strategic goal of ‘create another SINOMACH Overseas’,” said Zhang Chun.
Remain true to the original aspiration, keep the mission firmly in mind, and embark on a new journey toward the goal
In 2018, China has made fruitful results thanks to its reform and opening up. The year marks the 40th anniversary of the founding of CMEC, which has formed six business segments including EPC as the basis, as well as trade and services, design consultation, CMEC Logistics, CMEC Properties, and CMEC Agriculture. While taking part in the “Belt & Road” initiative, CMEC responded actively to China’s national policy on cooperation with other countries on industrial capacity, aligned with China’s industrial capacity, developed an industrial alliance, made it its mission to promote industrialization of developing countries, paid more attention to innovations in technical equipment, market development, and industrial chain, and drove development by making innovations.
“CMEC was founded on June 1, which is the International Children’s Day. Jia Qinglin, the first general manager of CMEC, said at the ceremony of the first anniversary of the founding of CMEC on June 1, 1979, ‘we celebrate the founding of CMEC on such a day, symbolizing that we should study hard, make progress every day, and grow healthily, full of vitality’. We always bear in mind the speech and are curious about new things, which make us constantly make innovations and explore various new business areas and models. For example, we are now making arrangements for CMEC Agriculture, and creating new growth areas in cooperation with other companies under SINOMACH,” said Zhang Chun.
“In the future, we need to base ourselves on industrial transformation and upgrading, make CMEC bigger, stronger and better, explore the reform of mixed ownership, actively carry out merger & reorganization in accordance with business requirements, obtain high-end market resources, and enhance development vitality and internal impetus to growth. We shall make good use of the advantages of CMEC’s listing on the Hong Kong Stock Exchange, seek for strategic resources in the international capital market, and support the needs of CMEC for rapid development. We shall have a firm grasp of the domestic and overseas markets, fully integrate the domestic and overseas resources, find the right point of breakthrough, and take well-targeted steps to develop the new core competitiveness of CMEC.” On the basis of the mechanical industry, we shall remain true to our original aspiration and keep the mission firmly in mind and have embarked on a new journey of development. At the work meeting held at the beginning of 2018, the new leadership of CMEC proposed that on the basis of maintaining healthy development we shall reach annual operating revenue of RMB50 billion in five years and annual operating revenue of RMB100 billion in 10 years.
We will redouble our efforts for merger and reorganization, follow the strategy of the state (SINOMACH), and explore the reform of mixed ownership. A blueprint has been mapped out, let’s grasp the moment and do our endeavors to realize our dream! (Correspondent/Zhao Qi, Reporter/Zhang Yi)




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