Bright Prospects For Cooperation Between Venezuela And SINOMACH

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The global financial crisis has brought severe adverse impacts on global economies and the wellbeing of the people. Confronted by this

global challenge, China is firmly determined to work together with other countries in the world to overcome the difficulties.

This year, the Chinese government has placed maintaining a stable and moderately fast economic growth as a top priority. This is a major decision based on the overall situation. If China can maintain a good economic growth, that will be an important contribution to the stabilization of the global financial market and the development of the world economy.

A sustainable economic growth will help maintain a good momentum, ensure social stability and people’s wellbeing. As key players in economic activities and main contributors to economic growth, all enterprises need to play a core role in maintaining the economic growth. At this special time, this is the foremost corporate social responsibility all enterprises should assume. SINOMACH has the confidence and determination to overcome difficulties and achieve the targeted 8% growth in its core business revenues and total profits this year, by increasing investments, enhancing management efficiency and intensifying marketing efforts both at home and abroad. In the meantime, more inputs will be diverted towards areas like technical innovations,

industry structural adjustments, technical renovations, as well as merger and acquisition activities. Funds dedicated to scientific and technological development have been increased from 50 million RMB last year to 100 million RMB this year. Several billions of RMB has been allocated to promote technical innovations, capacity expansions, marketing developments and industry bases. These measures will help promote changes in the growth mode and ensure the economic growth on the basis of the improved quality, structure and profits, and the reduced consumption and the better environment. They will also help create new economic growth points and competitive advantages.

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SINOMACH Voice

China in All Efforts to Attain Economic Growth

Focus of Attention

SINOMACH’s Business Volume Exceeded RMB 100 Billion in 2008

SINOMACH Honored with China Charity Award

Mr. Ren Hongbin, Chairman of SINOMACH

Delivered Keynote Speech at the China-Venezuela Business Forum

CEI Authorized by U.S. CPSC As the Third Party Certification Agency for

Chinese Toy Suppliers

High-level Exchanges

Project Updates

CAMCE Signed the Commercial Contract for the Reconstruction and

Extension Project Phase III for Guarico River Irrigation System in Venezuela

CNEEC Signed Contract for 2 x 300 MW Power Station Project for

Philippines

The World Highest Sewage Treatment Plant Completed in Tibet

Thilawa Shipyard in Excellent Conditions after Ten Years Operation

CMEC Successfully Signed Electrification Project for Southern Suburbs of

Luanda in Angola

Cambodian Taty Hydropower Station BOT Project in Smooth Progress

Residential Housing Project Going on Well in Libya

Special Feature

Top Ten Revitalization Industries Announced by Chinese Government to

Cope with Financial Crisis

Shipbuilding Industry

Electronics Industry

Automobile Industry

Textile Industry

Iron and Steel Industry

Nonferrous Metal Industry

Petrochemical Industry

Mechanical Equipment Manufacturing Industry

Light Industries

Logistics Industry

Trade and Services

Automobile Business of SINOMACH

FAX From The Front

Transnational Rescue of A 19-year-old Migrant Worker

SINOMACH Subsidiaries

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China in All Efforts to Attain Economic GrowthBy Ren Hongbin, Chairman of SINOMACH

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FOCUS OF ATTENTION

SINOMACH’s Business Volume Exceeded RMB 100 Billion in 2008

The Second Ch ina Cha r i t y Conference hos ted by the Ministry of Civil Affairs of

People’s Republic of China was held on December 5, 2008. Enterprises, individuals and organizations with outstanding contributions to the national charity work in 2008 were selected for the award. SINOMACH won the honorable title of “Domestic-funded Enterprise with Most Love” from China Charity Award. China Charity Award is the top national government prize in Chinese social public welfare and charity affairs.

E v e r s i n c e i t s f o u n d a t i o n , S INOMACH has been a t t ach ing great importance both to its business development and to i ts corporate social responsibilities. By adhering to its philosophy of “paying back to the society”, SINOMACH has been actively

SINOMACH Honored with China Charity Award

Mr. Ren Hongbin, Chairman of SINOMACH Delivered Keynote Speech at the China-Venezuela Business Forum

involved in various charity affairs, such as participating in public welfare programs like“China Children Charity Day”, donating for Hope Schools in Hebei, Jiangxi and other provinces. Altogether RMB 7 million has been donated to schools in various locations both in the form of cash and materials. “SINOMACH Loving Fund” was set up to help employees with economic difficulties, medical care needs and education of their children. SINOMACH was also an active player in the fight against snowstorm and earthquake. In the post-earthquake relief efforts in particular, total donations made by SINOMACH both in cash and materials amounted to RMB 50 million. The donations included dozens of bulldozers worth of RMB 26 million, excavators, loaders, road-rollers and other construction machines needed

Despite the rampant international financial crisis, SINOMACH still made brilliant achievements in 2008. Statistics showed that the business volume of SINOMACH reached RMB 111.9 billion. Major business indicators also reached new records in history, with the core business revenue of RMB 93.3 billion and total import and export of 6.3 billion U.S. dollars, a 38% and 5% increase over the same period of 2007 respectively. Total profits also rose by 33% over 2007.

for quake relief campaigns as well as more than 100 electric power generating units. At the same time, about 100 man-times of rescue teams, mechanical engineers and logistics personnel were dispatched for the earthquake relief work.

D u r i n g t h e p o s t - q u a k e reconstruction, SINOMACH undertook the critical task of engineering design for reconstruction project at a different location for Dongfang Turbine Company

Limited (Dongfang Turbine) and dispatched two “Xinjiang-2” combine harvesters to help farmers in the disaster-hit area to harvest the wheat quickly. Altogether 40,000 sets of relocation houses for the earthquake-hit areas had been designed by SINOMACH free of charge. In addition, relevant technical services were provided for large storage facilities, hydropower stations and other important facilities endangered after

the earthquake. The care and concern showed by SINOMACH for the welfare of its employees and the general public has won wide-ranging recognition of various circles of the society. In 2006, SINOMACH was selected as the “Enterprise with the Best Social Responsibilities” and Mr. Ren Hongbin, then president of SINOMACH, was selected as the Entrepreneur with the Best Human Solicitude”.

At local time on February 17 in Venezuela, Venezuelan President Hugo Chavez and Chinese Vice

President Xi Jinping jointly attended the China-Venezuela Business Forum in

Caracas, the capital city of Venezuela. Mr. Ren Hongbin, chairman of SINOMACH, delivered a keynote speech at the forum on behalf of the Chinese entrepreneurs entitled “Make Greater Contributions to

the China-Venezuela Trade and Economic Development by Sticking Together and Winning Together”.

In his speech, Mr. Ren Hongbin recalled SINOMACH’s development

China-Venezuela Business Forum

By Yu Xuejuan

By Chen Xingxiang

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Ch i n a N a t i o n a l E l e c t r i c Apparatus Research Institute (CEI) recently became the

first third party testing and evaluation agency for the toy industry in China that had been authorized and recognized by the Consumer Product Safety Commission (CPSC) of the United

States. After the authorization, CEI could provide services to Chinese toy suppliers in terms of certification tests, consultation services and rectification recommendations, in accordance with relevant requirements of the Consumer Product Safety Improvement Act of the United States in 2008. They will

help exercise strict quality control on exported toys made in China and promote technical upgrade in the domestic toy industry. This would play a positive role in overcoming the quality and technical barriers, further promoting export of domestic toys and minimizing trade conflicts.

CEI Authorized by U.S. CPSC As the Third Party Certification Agency for Chinese Toy Suppliers

HIGH-LEVEL EXCHANGES

in Venezuela over the past decade and expressed his appreciations for the supports extended by the governments and leaders of both countries. Mr. Ren also expressed SINOMACH’s desire for a greater role in the future trade and economic cooperation between the two countries. In his speech, Mr. Ren presented two goals for the cooperation between SINOMACH and Venezuela in the agricultural fields. The first goal was to ensure the successful execution of the existing projects and thus bring about the long-term benefits of these agricultural infrastructure projects in the soonest time, which will lay down a good foundation for the agricultural, social and economic developments in Venezuela. The second goal was to further expand cooperation between the two countries in the agricultural fields and help Venezuela in its national development, by introducing more new

products and technologies that had been widely applied and proven successful in China to Venezuela.

After Mr. Ren’s speech, the Venezuelan Minister of Agriculture and Land expressed his appreciation for the outstanding contributions made by SINOMACH in the construction of agricultural infrastructure projects in Venezuela and conveyed his willingness to further expand and deepen the cooperation between the two sides in the future.

Venezuela President Chaves and Chinese Vice President Xi Jinping delivered their congratulations for the successful opening of the forum. After the forum, Mr. Wan Jifei, Chairman of the China Council for the Promotion of International Trade (CCPIT) and the Venezuelan Minister of Light Industry and Trade signed a Memorandum of Understanding for the cooperation in

the establishment of China-Venezuela Business Council.

Trade and economic cooperation between SINOMACH and Venezuela could be traced back long time ago. As early as in 1990s, SINOMACH entered the market in Venezuela as the exporter of agricultural machines and equipment and provider of after-sales service. Since 2001, SINOMACH implemented a number of agricultural infrastructural projects, including the provision of agricultural machinery and equipment. These cover major projects like the water supply project in the Falcon State, the comprehensive agricultural development projects in Guarico Irrigation Zone, and the agricultural produce processing plant projects, among others. Currently, cooperation between the two sides is constantly deepening, with pretty good future prospects.

On February 9, Chairman Ren Hongbin met Mr. Salman Fazlur Rahman, vice president of DOHA Agencies from Bangladesh and his delegation at SINOMACH corporate headquarters.

On December 19, 2008, Mr. Xu Jian, president of SINOMACH met Mr. Leo DELCROIX, former Vice Prime Minister of Belgium and now Chairman of the Belgian Organizing Committee for 2010 Shanghai Expo. Both sides had friendly discussions on future cooperation in relevant fields.

On December 17, 2008, SINOMACH President Mr. Xu Jian and CFO Mr. Luo Jiamang met with Mr. Steven J. Puig, vice president of the Pan-American Development Bank and his delegation at SINOMACH corporate headquarters.

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On December 12, 2008, Mr. Wang Songlin, vice president of SINOMACH, met with Mr. Renaud Gasc, Chief Commercial Officer of the Dutch SPYKER Car Company and his delegation at the SINOMACH corporate headquarters. Both sides had friendly discussions on potential cooperation in relevant fields.

On March 13, Mr. Xie Biao, Vice President of SINOMACH met Mr. Hosseini, Chairman of Iran Oil, Gas & Petrochemical Products Exporters’ Association at SINOMACH corporate headquarters.

On November 18, 2008, First Lady of the Congo (Brazzaville) paid a visit to the project site of the Imboulou Hydropower Station, which was under full-swing construction. CMEC serves as the qeneral contractor for this project.

PROJECT UPDATES

CAMCE Signed the Commercial Contract for the Reconstruction and Extension Project Phase III for Guarico River Irrigation System in Venezuela

A t local time on February 18 in Venezuela, China CAMC Engineering Company Limited

(CAMCE) and the National Rural Development Agency of Venezuelan Ministry of Agriculture and Land signed the commercial contract for the reconstruction and extension project Phase III of the Guarico River Irrigation System in Venezuela. The project, with contract value over 300 million U.S. dollars, was scheduled to be completed wi th in 18 months . Chinese Vice

President, Mr. Xi Jinping and Venezuela President, Mr. Hugo Chaves jointly witnessed the signing ceremony at the Presidential Palace in Venezuela.

The reconstruction and extension project of Guarico River Irrigation System is situated in the Guarico State in the central northern part of Venezuela. This contract is a supplementary agreement to the commercial contract of Phase I and II for the reconstruction and extension project of the Guarico River Irrigation System, involving

the continuation of the reconstruction and extension of about 35000-hectre irrigation zone, the construction of new rural communities, the repair and construction of road systems in the irrigation zone and the establishment o f a g r i c u l t u r a l d i v e r s i f i c a t i o n demonstration bases and agricultural produce process ing parks in the irrigation zone on basis of Phase II of the reconstruction and extension project for the Guarico River Irrigation Zone.

By Zhang Xinyu

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CNEEC Signed Contract for 2 x 300 MW Power Station Project for Philippines

The World Highest Sewage Treatment Plant Completed in Tibet

On February 6, China National E l e c t r i c a l E q u i p m e n t C o r p o r a t i o n ( C N E E C )

signed the EPC contract for the 2 x 300 MW Mariveles Power Project in the Philippines with total contract value of 580 million U.S. dollars. This project consists of two units of 300 MW coal-fired power plants and has been the only

development project in the Luzon Island approved by the Department of Energy of the Philippines. The first unit is scheduled to be constructed within 35 months and put into full commercial operation within 38 months. The completion of the project will help alleviate the sharp shortage of the power supply and promote the economic development in the Philippines.

Sources of fund for the Mariveles Power Station Project come from both equity investments and bank loans. Bank loans will be provided both by the local banks in the Philippines and via buyer credit loans provided by the Export and Import Bank of China and other Chinese commercial banks.

Civil construction of the Changdu Sewage Treatment Plant in Tibet was completed recently

by China Cmiic Engineering Corporation (CMIIC).This sewage treatment plant is currently the highest one in the world in terms of altitude.

Located 3,290 meters above the sea level, Changdu Sewage Treatment Plant is the first of its kind constructed at the source of Lancang River. With

the total designed processing capacity of 18,000 tons per day, phase I project would hold a treatment capacity of 9,000 tons per day once it’s completed. This project is jointly financed by China and Germany, with 6.13 million Euros donation from Germany and a counterpart fund of RMB 30 million from China.

After the plant is completed and put into operation, the sewage will

be treated and reach first class type B criteria per the National Discharge Standard of Pollutants for Urban Sewage Treatment Plants before discharging into Lancang River. This will play an important role in the protection of the water quality and water safety at the source of Lancang River and would bear great significances for the economic deve lopment and envi ronmenta l protection in Changdu Region.

Thilawa Shipyard in Excellent Conditions after Ten Years Operation

On D e c e m b e r 1 2 , 2 0 0 8 , Myanmar Thilawa Shipyard b u i l t b y C h i n a C A M C

Engineering Company Limited (CAMCE) had its ten-year anniversary celebration held in Beijing. The keynote of the celebration was “Brilliances through A Decade’s Hard Work”. Madame Luo Yan, Chairman of CAMCE first recalled the history of the Thilawa Shipyard Project, and then presented the current development of CAMCE. She finished her speech by thanking all distinguished guests who attended the ceremony for their help and supports to CAMCE.

Project Phase I of Myanmar Thilawa Shipyard was completed on

The tenth anniversary celebration of the Thilawa Shipyard of Myanmar

Part of Thilawa Shipyard

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Cambodian Taty Hydropower Station BOT Project in Smooth Progress

Residential Housing Project Going on Well in Libya

Cambodian Taty Hydropower Sta t ion , the f i rs t projec t undertaken by China National

Heavy Machinery Corporation (CHMC) under build-operate-transfer (BOT), has been proceeding smoothly. At present, China Export and Import Bank has issued the “Letter of Intent” for financing the project, while China Export Credit Insurance Company has issued “Letter of Intent” for the investment insurance. The construction of the project would be started this year and the power generation would start

around 2013. According to the plan of the Cambodian National Electric Power Corporation, the power generated by this hydropower station would be transmitted to the Phnom Penh-Battambang Power Grid.

The Taty Hydropower Station is located on Taty River in the Khett Kaoh Kong Province along the southwestern side of the Kravanh Mountains in the western part of Cambodia. Three units would be installed with a total installed capacity of 246 MW and the annual power output of 858 M Kilowatt-

hours, running for 3,488 hours. The operation life would be 42 years, including the 1-year preparation and the 4-year construction period. The actual operating period would be 37 years. The project would be executed under BOT, with the total investment of 540 million U.S. dollars. It would be jointly financed by the owner and the financial institutions and consortiums. The owner will be directly involved in the management of the construction, to exercise direct control over the project by the investors.

The construction project for 4,000 residential houses undertaken by SINOMACH as the prime

contractor for the city of Zawiyah in Libya is going on smoothly. To date, various upfront preparations are being taken in an orderly manner.

The EPC contract for this project was signed on January 23, 2008 and came into force on July 31, 2008. Third Design Research Institute under SINOMACH has been consigned with the actual implementation of the project. A total of 4,000 residential houses will be constructed over an area of 150 hectors. Auxiliary public facilities, access roads, pipel ine networks, landscaping and other infrastructures will also be constructed. The project, with a total contract value of close to 600 million U.S. dollars, is scheduled to be completed within 36 months.

Following the completion of several power projects in Angola, China National Machinery

and Equipment Import and Export Corporation (CMEC) signed the EPC contract for the “Electrification Project for the Southern Suburbs of Luanda in Angola” with the Electric Power Agency of Luanda Municipality on January 5,

2009. With a total value of 298 million U.S. dollars, this is the largest power project in terms of the single contract value, ever signed by CMEC in Angola.

The project would be located in the suburbs of Luanda, the capital city of Angola. The main scope of works includes the construction of substations, transmission lines and power distribution

facilities for local communities. The implementation of this project would help establish 15kV backbone distribution networks in the southern suburbs of Luanda, which would help improve the power supply conditions and the power usage quality for local residents and promote the social and economic development in the local communities.

CMEC Successfully Signed Electrification Projectfor Southern Suburbs of Luanda in Angola

November 15, 2001, with EPC contract executed in October 1998. It was the largest project contracted by China in Myanmar. A comprehensive work had been done under the scope of work, including the construction of assembling harbor for 10,000-ton ships, world-class 5,000-ton ship lifting system, 1,500-5,000 DWT shipbuilding and repairing platform, world-class computer-aided

shipbuilding software, ten workshops for the vessel, welding and assembling, turbines, foundry, copper tubes, etc. and the auxiliary facilities such as water supply and drainage systems, sewage treatment, and boiler houses, etc. The shipyard was designed with an annual capacity of building 5 new ships of 1,500-3,000 DWT and repairing 50 ships of 1,500-3,000 DWT, with ship

lifting system reaching 5,000 tons. A total area of 560,000 square meters is occupied, with land area of 270,000 square meters and factory building area of about 33,000 square meters. The shipyard remains in excellent operating conditions and has been spoken highly of both by the owner and by the local government.

The contract signing ceremony for 4000 residential housing construction project in Zawiyah of Liby

Artistic view of the project

Residential Housing Project Going on Well in Libya