Displaying the Leading Edge of the Machinery Industry
Actively Implementing the Belt and Road Initiative
(May 8, 2017)
China National Machinery Industry Corporation
Founded in January 1997, China National Machinery Industry Corporation (hereafter “SINOMACH”) is a state-owned key enterprise under the direct management of the Central Government of China, as well as a global Top 500 corporation.
SINOMACH is a large central enterprise group with the largest scale, a wide business scope, a complete business chain, and strong competence in comprehensive R&D in the Chinese machinery industry. Focused on equipment manufacturing and modern manufacturing services, it is bent on developing primary businesses of equipment R&D and manufacturing, engineering contracting, trade and services, and finance and investment. As one of the early birds to embrace the globalization drive, it now has over 180 overseas service agencies and its business has been extended to cover 190 countries and regions around the world. Therefore, it boats considerable industrial advantages in achieving win-win results in cooperation projects in countries along the Belt and Road.
I. Fully Displaying Traditional Advantages for Joint Construction of the Belt and Road
1. The Traditional Advantages of SINOMACH along the Belt and Road
SINOMACH is the largest provider of engineering contracting and trade services in Chinese machinery industry. As one of the first enterprises to “go global,” SINOMACH has achieved a rapid development, great performance contributions and considerable influence. It has laid solid market foundations and a favorable brand image in countries involved in the Belt and Road Initiative. Its overseas business covers a complete industrial chain encompassing project development, investment and financing, engineering planning, reconnaissance, design, construction, complete sets of equipment and operation and maintenance management. In addition, the company gradually expands to overseas mergers and acquisitions, striving to explore the path and lead the way in the internationalization of industry.
Over the two decades since its establishment, SINOMACH has proactively implemented cooperative projects in countries around the world and completed more than 1,200 overseas turnkey projects, covering various engineering areas including electricity, transportation, ports and ships, plant construction, communications, building materials, and automobile. Currently, a total of 433 overseas projects are being implemented, with a contract value totaling 36.5 billion US dollars. In 2016, its newly contracted amount totaled 43.9 billion US dollars which represented a year-on-year increase of 13.1%, and its overseas contracts grew by 57.6%. The foreign-related business has generated about 60% of the SINOMACH’s overall revenue, which was higher than most central enterprises and fellow enterprises in the industry. SINOMACH has made enormous contributions to promoting the economic development and popular welfare of host countries by launching overseas businesses.
2. Actively Gearing the Development Planning of the Enterprise to the Belt and Road Initiative
SINOMACH timely internalized the Belt and Road Initiative in its corporate planning, proposing in 2015 the objective of “creating a new SINOMACH overseas.” Prioritizing countries involved in the Belt and Road in its overseas business development, the group has promoted the globalization of its products, technologies, standards and services. In doing so, SINOMACH has become a dutiful participant in the economic and trade development of these countries.
SINOMACH targets at improving the industrialization level of the Belt and Road countries, with focus on studying and seizing the market opportunities brought about by these countries’ industrialization and urbanization. Following such method, the group actively participates in project construction in infrastructure interoperability, energy and resource cooperation, industrial investment and overseas park engineering. It actively undertakes the technological upgrading and renovation project of the enterprises in relevant countries. It also promotes the export of heavy equipment, agricultural and forestry machinery, engineering machinery, basic components and parts, smart manufacturing equipment and emerging green industry equipment by engaging in the reform and industrial upgrading of these enterprises in a variety of ways.
3. In-Depth Participation in Project Investment and Construction in Multiple Fields and Ways
So far, the completed and in-process projects by SINOMACH in the 48 countries involved in the Belt and the Road Initiative totaled 773. With a contracted amount of 73.645 billion US dollars, these projects cover public utilities, energy, environmental protection, water conservancy, housing construction, industrial construction, petrochemical, traffic and other fields. It is making unique contributions to promoting the development of host countries, improving the livelihood of their people, enhancing mutual friendship and promoting win-win situations.
Through active implementation of these projects, SINOMACH has strengthened the localizing operation, promoted the economic development, technological progress and employment opportunities of the host countries and greatly improved the livelihood of their people.
II. Turning Each Project a Monumental Work
1. Construction of BOT projects along “the Belt and Road”
Tatay Hydropower Station built with SINOMACH investment is one of the influential projects. It is the single-stage hydropower station with the largest installed capacity in the Kingdom of Cambodia. Accounting for one-fourth of its total installed hydropower capacity, it ensures power supply for industrial production and daily life to Phnom Penh the Cambodian capital, Koh Kong Province and other areas.
Upon the completion of the project, Cambodian Prime Minister Hun Sen heaped his praise, saying that “Tatay Hydropower Station will not only benefit the flood control, become a potential tourist resort, create jobs and increase local residents’ income, but also enhance Cambodia's power supply capacity and security and provide affordable electricity. It will play a pivotal role in promoting the comprehensive social and economic development and poverty eradication in the country.”
2. Engineering Projects Contracted along “the Belt and Road”
(1) Thar Coal-Power Project in Pakistan is expected to promote the efforts of the country to replace imported oil with domestic resources (coal) and help balance the international payments. It will also significantly ameliorate the overall underdeveloped mining sector of Pakistan, improve its electricity supply, and directly or indirectly create jobs for the underprivileged residents of Thar Region and thus improve the local economic situation.
(2) Putnam Coal-Fired Power Plant in Sri Lanka furnishes 45% of all the power generated throughout the country. After the plant was put into use, the President of Sri Lanka announced on site his decision to cut electricity price by 25%. The aerial view of the project has been printed on the newly issued banknote of 100 rupees, symbolizing the prosperity and development for the country.
(3) The housing project in Maldives helps 1/50 of the population realize their dreams for owning their own homes. The project marked the first time that the Maldivian government developed the country's infrastructure from foreign loans. In December 2012, Phase I was delivered one month ahead of schedule, and 7,000 residents moved to their new homes. Although there was no Chinese resident, the local residents amiably named Phase I of the housing project “Chinatown,” aptly reflecting the continual friendship between China and Maldives that has been passed down from generation to generation.
III. Turning the China-Belarus Industrial Park into a Landmark Project
1. A Project with High Hopes from the Leaders of the Two Countries
The China-Belarus Industrial Park is the largest economic and trade cooperation zone with the highest level of cooperation built by China overseas. The project has been advocated by the heads of the two countries with the generous support of both governments, and developed and operated under the leadership of a large central enterprise of China.
Its development and construction has been directly promoted by the heads of the two countries. In March 2010, Xi Jinping, then Vice Chairman of China, paid a visit to Belarus where he reached a consensus with the Belarusian government on establishing a development zone in the country. In June 2012, Alexander Lukashenko, President of the Republic of Belarus, issued the Presidential Decree on China-Belarus Industrial Park Project, granting at the highest level possible a series of legislative preferential policies to the industrial park.
In May 2015, President Xi and Belarusian President Lukashenko inspected the progress in the construction of the Industrial Park, and expressed their high hopes for its development. President Xi Jinping pointed out that China-Belarus Industrial Park marked an “upgraded version” of cooperation between China and Belarus and a landmark project on the “Economic Belt of the Silk Road.” President Lukashenko pointed out that efforts should be redoubled to turn it into a cornerstone for friendship and cooperation between China and Belarus.
“Today, to do business with Europe, you need to have your own advantages, as well as quality products with lower prices. Now, those products are mostly made in China,” President Lukashenko told the reporters during an interview on the China-Belarus Industrial Park, “Let’s set up businesses here, in the very center of Europe!”
“More and more enterprises are registered to move their business into the park. We have completed some infrastructure construction. With generous support from the governments of China and Belarus, we can now offer some very preferential taxes for the enterprises. The industrial park would become a channel for Chinese companies to come to Europe, and we sure hope that the park could help our products make their way into the Chinese market, which is now one of the biggest markets in the world,” said Rudy Kiryl, the Belarusian Ambassador to China.
2. Equal Emphasis on Investment and Infrastructure
Belarus is an important node for the Belt and Road, as well as the European portal for the Silk Road Economic Belt. China-Belarus Industrial Park is located 25 kilometers east of Minsk, capital of Belarus, close to the Minsk International Airport and covering a total of 91.5 square kilometers. The M1 Intercontinental Road from Moscow to Berlin and M2 Expressway connecting urban Minsk to the airport run right through the park. In addition, China and Belarus are connected by many railway trunk lines from China to Europe. Located to their southwest, the China-Belarus Industrial Park is perfectly linked to Asian and European countries in terms of land transport.
The idea of global investment promotion has been established for the China-Belarus Industrial Park. The focus will be placed on the five leading industries of electronic information, machinery manufacturing, fine chemicals, new materials and bio-medicine, and efforts will be enhanced to build the warehousing, logistics and other supporting service systems. In addition, global resources will be integrated for the gradual establishment of manufacturing centers, R&D centers, logistics centers, business centers and financial settlement centers.
By the end of 2016, infrastructure construction for the start-up area of 3.5 square kilometers has been completed, including 13 kilometers of road, pipe network/water supply and drainage, gas supply, power supply and communication, or what the Chinese builders would call “seven accesses and site leveling.” With a total of 303 hectares of land ready for sale and rent, the park has the conditions for comprehensively promoting foreign investment.
Eight companies from China and Belarus have formally brought their operations into the Park, including China Merchants Logistics Holding Co., Ltd., YTO Group Corporation, Zoomlion, Chengdu Xinzhu, ZTE, Huawei, Hongfu Radiator and Belarus Nano Pectin. In addition, 25 other companies including Aviation Industry Corporation of China and Weichai Power have signed the letter of intention to move their business into the park.
Construction of the 12,500-square meter office buildings and the 8,000-square meter plants has been completed. Among them, the standard plants are ready for rental. The office buildings are now undergoing internal decoration and are expected to be available in June. Among all the projects in the park, the China-Belarus Logistics Park (Phase I) invested by China Merchants Group was the first to commence construction, as well as the project with the largest investment and scale. Now 90% of the civil engineering for 100,000 square meters of logistics facilities has been completed and final completion is expected in June 2017, which makes it the first project to be put into use. The super capacitor project of Chengdu Xinzhu is under construction as the first productive project. Its completion and operation is expected in 2017.
3. Bright Prospects for Future Development
China and Belarus are bent on turning the China-Belarus Industrial Park into a paragon project of cooperation and mutual benefit in the context of the Belt and Road Initiative. At present, efforts are being redoubled to accelerate its development on the basis of coordinated planning and pragmatic progressing toward realization of the objective of “notable achievements in two years,” in a bid to implement the consensus between the two heads of state.
The China-Belarus Industrial Park will eventually become a new cosmopolitan city integrating industrial and urban functions, and an ecological and livable city of prosperity, vitality and innovation. Karateev, Vice President of China-Belarus Industrial Park, said that “today, Belarus is on the road to reform, without which there will be no survival, let alone development. Belarus has chosen the road to reform and decided to learn mainly from China, because China has implemented the reform and opening-up policy for many years with remarkable results. Belarus will draw on the best ones.”
In the new historical period, SINOMACH will further its efforts to seize the opportunities presented by the Belt and Road Initiative, innovate its international business model, promote coordinated development of its manufacturing, R&D and the international businesses of its industrial and trade enterprises, and continue to enhance the quality and level of its international operations, so as to make new and greater contributions to promoting the socio-economic development of countries along the Belt and Road and to improving the life of their people.