Baowu News

Stick to Reform as Momentum, and Ceaselessly Enhance SOE Vitality and Competitiveness Chen Derong Made a Speech at Theoretic Symposium for Celebrating 40th Anniversary of Reform and Opening up [ 2018-12-28 ]

CPC Publicity Department, CPC Reform Office, CPC Party School (Chinese Academy of Governance), CPC Party History and Literature Research Institute, National Development and Reform Commission, Ministry of Education, Ministry of Commerce, Chinese Academy of Social Sciences and Political Work Department of the People’s Republic of China Central Military Commission held theoretic symposium for celebrating 40th anniversary of reform and opening up in Beijing on December 23rd and 24th. Member of Standing Committee of Political Bureau of CPC Central Committee and Member of the Secretariat of CPC Central Committee Wang Hu’ning attended the conference and made a speech. Member of the Political Bureau of CPC Central Committee and minister of CPC Publicity Department Huang Kunming hosted the conference. Twenty people of relative departments of central and state organs, and responsible comrades of localities and enterprises, and specialists and scholars made speeches on the conference. Party Secretary of CPC China Baowu Steel Group Corporation Limited Committee and Chairman of China Baowu Chen Derong attended the conference on invitation, and made a conference speech titled “sticking to reform as momentum, ceaselessly enhance SOE vitality and competitiveness”. Full text of the speech is as follows:     

 

On December 23rd, 1978, the second day after the closing of the third Plenary Session of 11th CPC Central Committee, Baosteel project, as the first mega-scale industrial project constructed under decision of CPC Central Committee after China’s reform and opening up, started its construction. For forty years, from one plant to multiple plants, from single industry to multiple industries, from China to the globe, Baosteel, the product of China’s reform and opening up, had grown into China Baowu through numerous times of alliances and restructuring, sustained reforming and innovation amid severe domestic and foreign market competition, ceaselessly enhanced its enterprise vitality, and successfully ranked itself by comprehensive competitiveness among the leading positions of world peers, which sped up modernization of China’s steel industry, strengthened confidence for the route of modernized development of steel industry with Chinese characteristics, and provided enduring historical proof able to stand the test of times for China’s reform and opening up.         

 

At the beginning of reform and opening up, Chinese steel industry was at a low starting point with weak base, lagging far behind developed nations for at least twenty years. Under actual situations of a nation waiting to be rebuilt and a steel industry with huge discrepancy in supply, CPC Central Committee, starting from overall considerations of national strategy, formally authorized Baosteel Mission Prospectus in August 1978. Baosteel had persistently kept in mind mission endorsed by CPC Central Committee, not only imported advanced steel technical processes and equipments of the world in large scale, but also imported, studied and borrowed world advanced management practices in great quantity, and pioneered in a series of fruitful reforms. During Baosteel project construction, then Baosteel project commander-in-chief comrade Li Ming had initiated network management model with project general schedule at its center, and worked out one investment and management road of “high-level construction with highly profitable yields and high accumulation rate of capital”, percentage of equipment localized production had increased from 12% in phase one project to 88% in phase three project. Today, our metallurgical equipments had already started exporting in large scale. He frequently cautioned people, building Baosteel for the nation was not for producing “commonplace goods”, and Baosteel people should seek for bench-marking not with domestic enterprises, but with the most excellent steel enterprises in the world. Baosteel must produce those in urgent needs of the nation, those unable to be produced by other domestic steel enterprises, those of import substitutions for exporting, and products of high production difficulty, high added value that could be comparable with products of world advanced enterprises. Led by this philosophy, Baosteel had established the strategic goal to rank itself among world’s first class. After commissioning of the first phase project in 1985, Baosteel gradually shaped modernized management model characterized by “concentration, integration” and “five systems”. Meanwhile, Baosteel had pursued specialized labor division and social collaboration, initiated implementing laying off the redundant and increasing efficiency, and separating the main and supplementary businesses in SOEs, broken 8-tier wage system and carried out post and scaled salary, and initiated piloting of “five-day work system” in the whole country, labor productivity remarkably enhanced, and annual steel production per capita reached 680 tons, exceeding levels of then developed nations. At the beginning of 1990s, during process of shunting from planned economy to market economy, Baosteel took lead in proposing the management philosophy of “enterprise management with financial management at center, and financial management with cash management at center”, and practiced total budget management; proposed “service for users is concrete embodiment of service for the people”, carried out comprehensive user management, and established marketing service network covering the globe. Baosteel had also actively undertaken works of piloting for national authorized investment organizations, stock system reform and the Board of Directors, initiated the exploration for establishing corporate governance structure accommodated to modern enterprise system, and provided beneficial reference for SOE reform. Abiding by request of Deng Xiaoping for “being adept at studying and even more at innovation to master new technologies”, Baosteel stuck to technology innovation, researched, developed and manufactured a great batch of high-end premium steel materials for import substitutions for aviation and aerospace steel, steel for nuclear power, high-grade automotive sheets, pipeline steel, oriented silicon steel, etc., and worked out one “importation-digestion-assimilation-innovation”road for modernized development of steel industry.    

  

In 2000, Baosteel became the first ten million tons grade steel enterprise in the whole country, in 2003, it became one of the first enterprises to be ranked among global Fortune 500 in Chinese competitive industries and manufacturing industry, and through alliances and restructuring with Shanghai Steel, Meishan Steel, Bayi Steel, Shao Steel, Ning Steel and Desheng, it had been built into one premium steel production base and steel industry new process, new technology and new material R&D base, its comprehensive competitiveness was ranked among the first tier of world peers. In 2016, Baosteel and WISCO allied and restructured to form China Baowu Steel Group Corporation Limited. China Baowu stuck to supply side structural reform, swiftly pushed forward integration and fusion, its crude steel throughput reached the first place in China, and second in the globe, automotive sheet throughput reached the third in the globe, and silicon steel throughput reached the first place in the globe. It was ranked 162 among global Fortune 500. In 2017 and 2018, enterprise management performances doubled for consecutive two years.     

 

On April 24th, 2007, then secretary of CPC Shanghai Municipal Committee comrade Xi Jinping pointed out during his investigation in Baosteel Group, “having achieved such huge success by Baosteel proved that SOEs and state-owned economy have the full capacity to work out well”. Retrospecting on the development course of Baosteel, we could sincerely sense that this assertion of General Secretary Xi was not only affirmative and encouragement for Baosteel’s development, but also visionary, and having expressed trust and high expectations for vast SOEs of our nation.

 

From Baosteel to China Baowu, attainments we had achieved shall firstly be attributed to prudent decision of CPC Central Committee, to golden environment of reform and opening up of China, and to solid support of every walks of life and people of the whole nation. We could deeply sense from forty years’ reform and development practices that as SOEs, firstly, we must bravely assume the mission of aiming to be the world’s first-class enterprise, bench-mark with precursors, be strict and harshly demanding to ceaselessly intrigue enterprise vitality and creativity; secondly, we must stick to innovation, persistently walk on the road of study and innovation, actively integrate into market competition to ceaselessly enhance competitiveness in the world; thirdly, we must stand firm to reform, and persistently pursue efficiency and effectiveness enhancement drawn by system and mechanism reform to explore and build modern SOE regulations with Chinese characteristics; fourthly, we must stick to party leadership, persistently value display of SOE unique advantages, rely on the working class heart and soul and establish road confidence of building a strong nation with steel. That year, comrade Deng Xiaoping once predicted: history would prove, the decision to build Baosteel would be justified. Today, we could proudly announce, history had already proved that the decision to build Baosteel was justified.            

 

Reform is endless, and we are always on the road. Looking into the future, as a piloting enterprise of state-owned capital investment companies, China Baowu had already established a visionary goal to build itself into a global steel industry leader. We would ceaselessly improve business system of “one base, five elements”, speed up the realization of strategic objectives of “a thousand enterprises, a hundred famous MNCs of transferring and ten base cities”, actively integrate into the “one belt one road initiatives”, realize management at international scale; ceaselessly optimize management system of state-owned capital investment companies to realize transformation from industrial management to capital management; ceaselessly stick to innovation-driven, and push forward technology leading strategy, low-carbon green development and intelligent manufacture upgrade; ceaselessly strengthen steel Eco-system building, stick to common building, sharing and high-quality development to lead industrial transformation and upgrade.   

 

China Baowu would as always firmly remember its mission, keep closely united around the CPC Central Committee with comrade Xi Jinping at its center, fully implement and carry out overall request for CPC party building for the New Era, and pool to form tremendous dynamics to push forward reform and development. In the New Era of high-quality development, history would further prove: the decision to build Baosteel is justified!

Source:Baowu News Centre