The Party Central Committee and the State Council marched forward to implement national economic and social development policies.

The world economy continues to show slower growth that is adversely impacting domestic businesses. Accordingly, state-owned enterprises are confronting more challenges.

After years of reforms and developments, they maintain steady growth despite occasional obstacles. They have achieved progress in overall strength and competitiveness, while responding to a crisis and defense risks.

They are advancing towards becoming world-class enterprises.

Central enterprises have implemented national policies.

A poem, depicting determination and calm of employees of the State Development and Investment Corporation (SDIC) working in Lop Nur, says, "Coming from Lop Nor, you busy yourself at the ancient wasteland; in the yellow sand hidden your persevering smile."

In 2011, the first-stage project of the SDIC Lop Nur Potash Fertilizer Company achieved annual output of 1.3 million tons potassium sulfate, a 10 percent increase above its self-sufficiency rate.

The second-stage project, with annual output of 1.7 million tons started at the same period.

SDIC President Wang Huisheng, contends that investment decisions should be made from a national viewpoint. He said, "central enterprises should act according to national strategy and economic security."

Electricity prices are less than the cost of coal – this odd macro-economic phenomenon has become more prominent in 2011. Electricity consumption growth surged 11.7 percent from a year earlier that ignite a loss of tens of billions yuan in revenues for state enterprises that generate energy.

Jiang Yong, director of the Economic Security Research Center of the China Institutes of Contemporary International Relations, said, "as China’s ‘eldest son’, central enterprises should prioritize national needs no matter what!"

He added that they play a leading role to implement national policies, protecting economic security and balancing regional development.

Meanwhile, the launch of the space shuttles and satellites Shenzhou-8 and Temple-1 means that the country has opened the door for space station construction.

The "Jiaolong" manned submersible, aircraft carrier test platform, the 3,000-meter offshore drilling platforms launched a new journey for marine programs in the country;

In the Qinghai-Tibet Plateau, electricity "sky road" was built. Tibetans bid farewell to butter lamps;

In the oil sector, "overseas Daqing" and “maritime Daqing” were completed to guarantee the national energy supply;

In communications, the complete TD-LTE industrial chain led by Chinese companies was formed.
Central enterprises have been involved in major infrastructure projects to develop the economy and improve people's livelihoods. Its employees have shown dedication to their jobs.

According to the strategic plan of PetroChina to build an "overseas Daqing" in July 2011, Wang Guihai, known as the "overseas young iron man," departed from the project in Sudan and transferred over to the Rumaila project in Iraq.

Wang Guihai carried forward his "Iron Man Spirit" to find more oil and gas for his motherland, despite incidents of violence, sandstorms and heavy work schedules.

"I am an 'overseas oilman' from the hometown of Iron Man Wang. I will continue on with his spirit."

Chen Hongguang interviewed 35 overseas employees of the China-based GEO-engineering Cooperation and wrote, We Are Not Legends from Abroad, which was published in 2011.

He wrote in the postscript, "the interviews lasted more than a year and I was exposed to the inner world of so many overseas employees from state-owned enterprises. I heard numerous stories and seen many man's tears. My heart often felt shock. They are not some sort of legends. They are representatives of Chinese state-owned enterprises."

Lenin compared state-owned enterprises to the national backbone.

In 2011, the global financial crisis caused a double-dip recession for some countries. The European Union debt crisis continued to simmer. Central enterprises were engaged in oil, steel, shipping and other sectors that faced difficulties.

On the domestic front, labor costs, a tightening monetary policy, integrated costs for resources and environment have all brought about numerous challenges.

They have focused on comprehensive self-improvement for stronger business growth in accordance with the national “12th Five-Year Plan”for central enterprises.

They secured operating income of 20.2 trillion yuan, a year-on-year increase of 20.8 percent in 2011.

Net profits accounted for 971.31 billion yuan, up 6.4 percent and paid 1.7 trillion yuan in taxes, an increase of 19.7 percent, which accounted for one sixth of national tax revenues.

As of 2011, the assets size of 117 central enterprises reached 28 trillion yuan, up 14.9 percent year on year.

Net assets reached 10.7 trillion yuan, an increase of 11.4 percent. 38 central enterprises were listed as Fortune 500 companies, eight more than the previous year.

Peng Huagang, director of the Research Bureau of SASAC, said improvements of distribution structure and development quality boosted performance levels.

"Experiences of responding to the international financial crisis helped them maintain a clear head when suspending or eliminating projects this year. They become more reliant on management improvements and technology innovations, while focusing more on their main businesses," Peng said.

Central enterprises have acted as the "eldest son" of the country by taking over difficult tasks, such as the overseas Chinese evacuation from Libya, responding to a salt buying panic and helping with Yushu reconstruction.

After the 2011 Spring Festival, in Libya, mobs looted many construction sites and offices of Chinese enterprises, which sparked a rescue operation at an unprecedented scale.

Air China, China Eastern Airlines, and China Southern Airlines – organized charter flights. COSCO and China Shipping mobilized vessels to take compatriots home.

In Tripoli, principled by "man after lady, cadres after worker, party member after common people," China Railways Construction Corporation gathered its employees as well as other local Chinese to evacuate.

Within 10 days, central enterprises dispatched 76 planes and six ships to withdraw 33,481 workers and students.

When the evacuation ended, central enterprise faced another challenge.

The Japanese earthquake triggered a nuclear leak panic and afterwards rumors circulated that iodized salt could prevent nuclear radiation, which caused panic buying of salt.

One-day salt sales reached 371,000 tons on March 17, more than15 times normal sales. Table salt was sold out at retail outlets while some traders drove up prices.

The China National Salt Industry Corporation assumed the task to quell the storm. Wang Junfeng is head of the Salt Franchise Department. He gave a vivid picture of what was going on during those days and nights.

He was "grounded" at the office for two days. He had to use a cell phone with the charger on. We had two concerns – to stop the rumors and to ensure the supply, Wang said.

"The incident proved that central enterprises can help address problems," said Jiang Yong.

Building new homes for Tibetans

At 10 am, August 24, 2011 on the Tongtian riverbank in Yushu, the sun shined on the white walls of a brand new Tibetan home.

A man, surnamed Li, in Shangsaiba village, Xiewu town was sitting in front of the house smoking a cigarette. His granddaughter and neighbor's kids were playing nearby.

Yang Xiukun, who designed the new house, was happy to see them settle down. In early October 2010, he arrived as an aid worker of the Sinohydro Engineering Bureau 4 Co Ltd. He ate instant noodles for more than a month.

The cold wind blew in the night and wolves and bears raided the village from time to time. He said, “I was so scared. But I decided to hold on and do even better.”

By 2011,  housing for herdsmen, funded by four central enterprises was completed. A project to construct  schools, hospitals and other public facilities basically is nearly 70 percent completed.

Tens of thousands of workers from central enterprises built new roads and houses.

They hold up new hopes for 300,000 Tibetan children, believing, "to spirit up amidst an oxygen deficit; to have higher morale in high altitudes."

"Reconstruction earned them no profits. It is the duty of the central enterprise to do it," said Liu Yuqi, deputy director of the Planning Bureau of SASAC and deputy commander of the Yushu Post-disaster Reconstruction Site Command Center.

Meanwhile, the Chinese Academy of Social Sciences released a Corporate Social Responsibility Blue Book, in November 2011

The development index and annual increases of CSR for central enterprises stands out as far ahead. With practical actions, central enterprises truly are the "eldest son" in the country.

In Banbar County, Tibet, the one-to-one aid area by China Telecom spread across mountains stretches with precipices and cliffs. Most locals did not speak Mandarin, except for China Telecom employees.

In Jiama village, Maizhokunggar County, to avoid harming the environment, China Gold spent tens of millions yuan more to cut tunnels through the mountains to build roads.

In Yilan County, Heilongjiang, Liu Wenchang, head of the Xingwang Rice Cultivation Co-op, found that household incomes of local farmers surged to over 10,000 yuan thanks to contracting farming with COFCO.

From 2008 to the end of the third quarter of 2011, central enterprises had donated more than 15 billion yuan. Many enterprises such as Baosteel, COSCO, China Southern Airlines, China Merchants Group have established corporate foundations.

Dongfeng Motor donated 10 million yuan to set up a special fund to help college village officials; CTS supported Hong Kong SAR government to carry out "Passing on the Torch" educational activities, which enhanced the national identity of Hong Kong youths.

Until now, 93 central enterprises have participated in targeted poverty alleviation in 189 key counties, which covered 21 provinces and 83 million people.

The power grid and telecom companies invested in "village to village connections"; agricultural enterprises strengthened the "agriculture, rural area and farmer" services; and real estate enterprises invested and constructed affordable housing.

As of 2011, 75 central enterprises had released social responsibility or sustainability reports.

China Mobile is listed in the Dow Jones Sustainability Index for four consecutive years, while China Minmetals obtains the honor of environmental pioneer issued by the United Nations Global Compact.

According to Peng Huagang, central enterprises do more than donate money and perform some  good deeds.

It helps incorporate social responsibility into business activities.

Comprehensive strength and crisis response capacity of central enterprises have improved, laying a foundation for the development of the 12th Five-Year Plan.

China Bluestar Chengrand Chemical Research and Design Institute of ChemChina produced aramid II soft fiber on May 27, 2011.

"The intensity of the cord made of the fiber is five times as much as the wire cord. Composite materials made from the fiber can be used for more than 10 years in a temperature as high  as 220 ℃," Cao Xianjun, director of Bluestar Chengrand Institute, said.

He added that this marked the end of a 30 years' foreign monopoly in the sector and boost its future development.

Innovations signify the soul of enterprise developments in regards to technology, management and culture.  

In 2011, thanks to the "legal person operation mechanism of corporate internal simulation” and the “production-supply-marketing use of rapid linkage reaction mechanisms," Xinxing Cathay International Group Co Ltd secured annual sales of 148.3 billion yuan, an increase of 84.6 percent year-on-year, while profits rose 38.3 percent and state-owned assets increment value-added ratio reached 111 percent.

Chairman Liu Mingzhong said, “through mechanisms, costs were reduced and profits were increased. The endeavors have laid a foundation for sustainable development.”

Chinalco also saw a V shaped curve in its operating performance in 2008. "We learned an important lesson from the financial crisis -- we must carry out structural adjustments," general manager Xiong Weiping said.

The company has been subjected to a slowdown of international markets and high raw material prices; the aluminum sector saw a selling price inversion.

"After a readjustment, we have nine business segments including aluminum, copper, rare earths, engineering and technology. Chinalco's competitiveness has been enhanced," Xiong said.

Although the thermal power business suffered great losses, Zhu Yongpeng, general manager of China Guodian Cooperation remains confident.

In five years, large generator units of 600,000 kilowatts or above will account for 86 percent of the thermal-power machine; the proportion for clean renewable energy will rise from 20.5 percent to 32 percent.

As the core competitive edge of the company, its operating income and total profits of the technology sector have risen at an average annual rate of over 50 percent.

"In previous years, central enterprises achieved rapid development. Then in the grim economic situation, they paid more attention to organic growth, rely on restructuring, technological innovations and management improvements," said Wang Zhigang, director of the Corporate Research Department, SASAC Research Center.

Reforms in 2011 stand out as equally remarkable, according to Wang.

Joint-stock reforms of the corporate system have continued. Six central enterprise holding companies went to a public offering and listing. China Minmetals, FAW Group completed its overall restructuring.

Ten central enterprises such as PetroChina and Sinopec were included in the board of directors' 42 pilot projects.

China Telecom, COMAC carried out the general manager selection through competition; CNNC, China Unicom implemented open recruitment for middle management positions; corporate dividends right pilot in China Aerospace, SINOMACH.

Two integrated power construction groups were established through reorganization; Lucky Group was incorporated into China Aerospace; China Commerce Group into China Chengtong Group; China Reform Corporation took over Huaxing Group.

Central enterprises including FAW Group reformed 632 collectively-owned factories that staffed over 89,000 people.

Central enterprises serve as the national backbone in international competitions. ChemChina, through its acquisition of the Israeli company, Maxim Agan, is among leading pesticide manufacturers in the world.

China State Construction started work on a US-Bahamas large-scale island resort project.

In the first 11 months of 2011, total overseas operating income and profits of central enterprises reached 3.4 trillion yuan and 128 billion yuan, up 30.7 percent and 28 percent respectively. The overseas growth rate was higher than its domestic businesses.

"Central enterprises pay more attention to technology, markets and resources in globalization. They enhance core competitiveness and international competitiveness," said Liu Wenbing, deputy director of the SASAC Reform Bureau.

According to the Central Economic Working Conference, the global economy in 2012 is likely to remain complicated. "Moving forward while maintaining stability" has become the general tone of economic and social development.

"Central enterprises must be aware of the complexity of the economic situation this year or even for a longer period of time to prepare themselves for greater challenges," said Wang Yong, director of SASAC.

The  changing world economic structure provides an opportunity for central enterprises to allocate its resources in the world.

"We will help central enterprises make good use of strategic opportunities to grow stronger, bigger, and into world-class enterprises," Wang said.