International Trade and Engineering Contract

International trade and engineering contract is one of Genertec,s business pillars.

Import

As the main channel of import and export for China's electrical and mechanical products and trade in technology, the import value of advanced technology and complete sets of equipment by Genertec's subsidiaries for the last 50 years is over USD 200 billion, covering such sectors as energy, transportation, telecommunication, chemical industry, metallurgy, light industry, textile, building material, petrol-chemical industry, environmental protection, machinery, shipbuilding, electronics, information, pharmacy, agriculture and forestry, education, urban construction and other fields of China,s economy and at the same time forms the distinct characteristic of taking the import of major technology and equipment, large complete equipment and mechanical and electrical machinery as its main business line. During the period of national economic recovery, Genertec's subsidiaries imported from the former Soviet Union and Eastern European countries large number of complete sets of equipment and engineering projects for 156 backbone projects in China, thus laying a primary industrial foundation for the nation. With the development of the national economy, the scope and size of the import business of Genertec's subsidiaries are also constantly expanding:

■In the transporation construction field, by way of international bidding, Genertec engaged in the construction of more than 70 expressways with the total length of 9000 km, mainly including Beijing-Tianjin-Tanggu Expressway, Urumuqi-Guitun Expressway, Shangqiu-Kaifeng Expressway, Liangpin-Changshou Expressway and Nanning-Shuiren Expressway, Ya,an-Lugu Expressway in Sichuan Province, Yinchuan-Wuhan High Way, Ankang-Shanchuanjie Expressway. Xiaogan Expressway in Hubei Province, and Dachang Expressway in Hebei Province.

Export

        It is Genertec,s strategic development priority to expand export, especially export of large complete plant, electrical and mechanical products and hi-tech products. On the basis of its advantages in human resources, market information, fund-raising at home and abroad and sales network developed over the years, the export of Genertec,s subsidiaries has witnessed rapid and strong growth in recent years at an annual increase of more than 10%.

        For a long time, Genertec's subsidiaries have been making full use of its advantages, dedicated to the export of large complete plant, electrical and mechanical products and high-tech products, and have formed operational characteristics. At present, Genertec's subsidiaries have expanded business ties with 100 countries and regions for the export of medium and large complete plants and technologies for chemical plants, cement plants, pharmaceutical plants and textile mills as well as large electrical and mechanical products such as ships and railway cars, covering such areas as chemical industry, building material, transportation, textile, electronic industry, light industry, coal, machinery, pharmacy, telecommunication, etc. For example, Genertec's subsidiaries undertook China,s biggest export project of technology and complete plant to Indonesia, a chemical plant with an annual output of 150,000 tons of soda ash and ammonia. The subsidiaries have also exported more than 70 ships of various types to ship owners from all over the world and nearly 1000 railway cars. Meanwhile, Genertec has maintained a large scale of business in exporting general electrical and mechanical products and instruments, pharmaceuticals and healthcare products. With regard to the high-tech products,Genertec exported computer systems and related technology, TV transmitting facility, laser crystal manufacturing technology and equipment and telephone switchboard.

Genertec has given full play to its advantages as a big international business group in undertaking overseas engineering contract projects. With the support of relevant Chinese government authorities and China Exim Bank, Genertec successfully completed China,s first turn-key project abroad, the coal mine project in Bangladesh, which had been officially transferred to the Bangladeshi side. In June 2005, the guaranteed output contract was signed for this project. Current projects in process include coalmine power station in Bangladesh, the export of 175 new model railway cars to Pakistan, and the modern sugar mill-upgrading project in Guyana, etc. Genertec has also signed engineering contracts for the Philippines Main Line South Railway Project, Coal-Fired Power Station Project in Indonesia, Ankara-Istanbul High-speed Railway in Turkey, Cement Plant in Yemen with daily production capacity of 5000 ton, Minsk No. 2 Thermo-power Station Transformation in Belarus, and export of 287 railway cars to Iran.

Foreign Economic Cooperation

Foreign economic cooperation is another business pillar of Genertec. For a long time relevant Genertec subsidiaries have been actively engaging in economic, technical and material assistance to foreign countries and regions by contracting a variety of engineering projects and projects of foreign investment in China and providing all kinds of engineering, manufacturing and service personnel abroad. Up to now, Genertec has established extensive economic cooperation relationships with over 100 countries and regions. Genertec has provided materials, equipment and technical services under more than 600 foreign economic assistance projects in areas such as agriculture, energy, light industry, chemical industry, telecommunication, communication, transportation, culture, education, public health and urban construction. Genertec subsidiaries have been playing an important role in China,s undertaking of foreign economic cooperation.

        To keep pace with China's reform on the government aids to foreign countries and regions, Genertec,s subsidiaries will, on the basis of consolidating their traditional foreign economic cooperation business, intensify their efforts to explore related business by undertaking foreign aid projects funded by concession loans and foreign aid joint venture or cooperative projects, improving their performance in overseas project contracting and labor export cooperation and raising Genertec,s international reputation.