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Speech at CBCSD 14th Conference on Latest Trends of Sustainable Development by Mr.Wang Zhongyu

Dear Representatives, Guests, Ladies and Gentlemen:

Good morning!

The 14th Conference on Latest Trends of Sustainable Development in 2018 is convened in Beijing today. Hereby, I sincerely express my warm congratulations to the convening of the conference and cordial welcome to all participating directors, member representatives and business friends on behalf of China Enterprise Confederation (CEC for short) and China Enterprise Directors Association (CEDA for short)!

Chinese President Xi Jinping made a keynote speech entitled “Openness for Greater Prosperity, Innovation for a Better Future” at the Boao Forum for Asia Annual Conference 2018 which was concluded recently. In the speech, he clearly pointed out that the reform and opening-up policy, as the second revolution of China, not only changed China’s status profoundly, but also deeply affected the whole world. China’s sustainable development is an important goal of the reform and opening-up. Themed on “Deepening Reform and Opening-up, and Corporate Sustainability in the New Era”, the conference is of practical significance for all enterprises to thoroughly keep abreast of the latest trends and new features of sustainable development and to bring the sustainable development of enterprises to a new level in the process of deepening reform and opening-up.

Since the 18th National Congress of the Communist Party of China, under the firm leadership of CPC and Chinese government, and with the joint efforts of the whole community, remarkable progress has been achieved in economic and social sustainable development. Through structural reform of supply chain, we steadily promoted capacity reduction, de-stocking, deleveraging, cost reduction and improvement of weak links. To be specific, we eliminated steel capacity of over 170 million tons and coal capacity of 800 million tons; decreased coal consumption by 8.1 percentage points, improved clean energy consumption by 6.3 percentage points and realized ultralow emission for 71% of coal power units through the optimization of energy structure; promoted such major projects as enhancing the foundation by industry, intelligent manufacturing and green manufacturing by implementing “Made in China 2025”, and accelerated the development of advanced manufacturing industry; turned from mainly driving the economic growth by the secondary industry to jointly driving by service industry through structure optimization and upgrading, with rapid rising of new format and new mode and prosperity of emerging industry; reduced energy consumption and water consumption per unit of GDP by over 20% on average yearly, increased forest area by 163 million mu and decreased the area of desertified land by nearly 2,000 square kilometers on average every year through strengthening ecological environmental protection. In 2017, the energy consumption for every RMB 10,000 of China's GDP reduced by 5.6% compared with last year, carbon emission intensity and other environmental indicators were higher than the intended goals, and the average concentration of fine particles (PM 2.5) in prefecture-level cities and above that do not reach the standard reduced by 5.9% compared with last year. On the whole, stable promotion in ecological civilization construction and mutual advancement of economic development and ecological environmental protection were achieved.

The 19th CPC National Congress held in October last year marked that socialism with Chinese characteristics has entered a new era, and building a beautiful China has become an extensive consensus and common vision of Chinese society. In the process of development, China is still facing many difficulties and challenges in sustainable development, which should be solved with great efforts. A prominent problem is that the actual effect of air pollution control falls far short of the expectation of the public. In 2017, 70.7% of 338 the prefecture-level cities and above under supervision represented unqualified air quality throughout the country. We must continue to carry out the “initiative of defending the blue sky” in many regions.
It is worth mentioning that the constitutional amendment was adopted at the 1st Session of the 13th NPC, indicating that the construction of ecological civilization is becoming more and more significant. The plan for institutional reform of the State Council which proposes to establish the Ministry of Natural Resources and Ministry of Ecology and Environment was also approved at the session. The establishment of the two institutions obviously indicates that great importance has been attached to sustainable development by the government. It provides a powerful system and organizational guarantee for overcoming shortages of systems and mechanisms and vigorously promoting economic and social sustainable development by seizing the opportunity of deepening reform.

As the micro foundation of national economy, enterprises play a fundamental role in sustainable development, and should keep a balance between immediate interests and long-term development as well as economic interests and social interests, strive to exploit and take responsibilities, innovate development pattern, and try to implement the requirements of high-quality development. Now I would like to take this opportunity to share my opinions with all of you for reference.

1. Firmly establishing the bottom-line thinking of ecological environmental protection in accordance with new situation and new requirements

The First Session of the Central Commission for Comprehensively Deepening Reform held on March 28 stressed that, to promote environmental protection supervision to further develop, we should focus on solving environmental issues, improving environmental quality and driving high-quality development of economy in the next step, and strengthen the political responsibility of ecological civilization construction and environmental protection. Upon establishment, the Ministry of Ecology and Environment has cooperated with relevant departments to comprehensively start seven special actions such as special monitoring and inspection action for nature reserves and comprehensive treatment for air pollution in key regions, and plans to complete the second round of central environmental protection supervision in about three years. By the end of 2020, China will comprehensively complete the delimitation of red line and calibration of boundary settlement for ecological protection throughout the country, thus basically establishing the protection system of ecological red lines. Generally speaking, as China has been determined to establish the red lines for ecological protection, ecological and environmental protection and control has become the rigid constraint of enterprise development, to which all enterprises should attach great importance. They should strengthen the senses of mission and responsibility, establish the bottom-line thinking firmly, and incorporate the green development concept into development ideas and plans. They should give full play to their crucial role, strengthen system construction, accept the supervision from the public consciously and make new achievements in sustainable development constantly.

2. Strengthening resource reorganization, and promoting structure optimization

Promoting the supply-side structural reform is the only way to achieve high-quality economic development in China. Enterprises should focus on promoting the optimization and upgrading of economic structure from a long-term perspective and in a down-to-earth attitude. Enterprises should also strengthen resource reorganization and merger and acquisition, eliminate outdated capacity and close down zombie enterprises, comprehensively reduce cost, improve operation performance, and seek growth points; promote technical transformation and updating of equipment, and improve production efficiency and product qualification rate through process optimization and re-engineering; promote new product development, accelerate product structural adjustment and drive the transformation and promotion of market structure. Take China National Machinery Industry Corporation for example. Through reform and perfecting management mechanism, the corporation successfully reconstructed its subsidiary China National Erzhong Group Co., Ltd., turned it into a profitable company in three years and brought new vitality to the company. Besides, by means of enterprise closedown, transfer, merger and liquidation and pooling resources to strengthen main business, CEC Panda Group disposed of 150 subordinate enterprises and reduced two corporate levels from 2007 to 2017. It also invested RMB 50 billion to establish 45 enterprises, thus achieving the updating and upgrading of products and equipment and industrial transformation and upgrading. The practice shows that an enterprise can achieve sustainable development only by steadily promoting resource reorganization and optimizing assets and structure.

3. Strengthening innovation power and promoting green and low-carbon development

Innovation is the first power of development, and green and low-carbon is essential to sustainable development, therefore only their organic integration can form the mighty resultant force for sustainable development of enterprises. It is necessary to actively build a global industry chain for the green consumption and carry out generic technology research of green manufacturing, to provide key technical support for green and low-carbon production; adapt to change of consumption concept and production mode to develop a batch of energy-saving, water-saving, low-pollution, reproducible and recyclable green products embodying green and low-carbon technology; promote the autonomous guarantee capability of major equipment through the innovative application of key technology and equipment of green manufacturing, form the technology system and independent innovation ability of green manufacturing; establish green development consortium by cooperating with the upstream and downstream of industry chain to promote the system integration of green development; timely track new rules and new standards on green development, strive to make technological breakthrough in key and difficult links and seize the opportunity during the implementation of new performance and standards. Based on breakthroughs in new materials, new process and new technology, GCL Group constantly launches competitive green energy products and comprehensive energy solutions, thereby growing to a world-leading photovoltaic full industry chain integrator. BNBM Group creates a full life-cycle green building industry chain from green raw materials, green production and green products to green transportation, green construction, green application and green recycling. They are the models in organic integration of innovation-led, green and low-carbon development, setting up a good example for other enterprises.

4. Enhancing management improvement, comprehensively promoting energy conservation and emission reduction

Management improvement is an eternal theme for enterprise development. Enterprises should implement energy conservation and emission reduction management in all fields and links of enterprise activities, and take energy conservation and emission reduction management as a key index for assessing its production and operation. Enterprises should also continuously optimize their business process and improve the operation efficiency of equipment by benchmarking management or other modern management means, and supervise, adjust and assess important operating parameters, in an attempt to minimize energy resource consumption; actively promote comprehensive upgrading and transformation of energy conservation and emission reduction, so as to optimally allocate internal and external resources of enterprises, effectively utilize wastes and build an industry chain of circular economy among industries; promote digital production based on a new generation of information technology, comprehensively improve the enterprises' ability of perception, prediction, collaboration and analysis for energy consumption and emission. Large enterprises should drive the upstream and downstream enterprises to work together to promote energy conservation and emission reduction by means of core industrial chain and green supply chain.

Dear representatives:

China has embarked on a new journey of building a modern powerful country in the new era. In future, enterprises will face new opportunities in sustainable development. I believe, as long as we take active measures, come down to earth and work hard, we will push forward sustainable development of China in the process of deepening reform and opening-up.
Finally, wish a complete success for this conference!

Thank you!

Mr. Wang Zhongyu
President of China Enterprise Confederation and China Enterprise Directors Association
(April 18, 2018, Beijing)