OREANDA-NEWS. December 31, 2013. Central Huijin Investment Ltd ("Huijin") came into being in 2003 amid financial reform in China. After making hard efforts in exploring and innovating practice and continually growing, it has become an important force in promoting financial reform and optimizing financial resource allocations in China.

Over the past 10 years, in accordance with its mandate from the State Council, Huijin has employed market means to actively perform its duty as a platform for state capital injection reform and as a state-authorized investor representative, promoted the deepening of reform at state-owned financial institutions, standardized corporate governance and scientific and prudent development, created a "Huijin Model" that is in line with the general direction of reform and actual national conditions, and explored and developed a new path for the management of state-owned financial assets. Looking back at the 10 years' journey of Huijin's development, as one who has experienced and witnessed it, I genuinely feel happy and proud of the accomplishments Huijin has made, and would like to express my warm congratulations on the occasion of the 10th anniversary of Huijin's founding!

Faithfully discharging its national duty by helping with financial reform and development. At the beginning of this century, at the critical moment of China's financial sector being plagued with non-performing assets and in "technical bankruptcy", Huijin embarked on the journey of reform of key state-owned financial institutions. As a platform of state capital injection reform, risk mitigation, and financial resource integration, Huijin took part in and pushed forward market reform programs such as the joint-stock reform of key state-owned financial institutions, the introduction of strategic investors, and public offering and listing. Organically integrating policy capital injection, market-based financing, and equity management, it has effectively reduced systemic risks, enhanced the financial industry's overall strength, its ability to withstand risk and achieve sustainable development, and improved the efficiency and corporate governance in the financial industry.

With vigorous support from Huijin, China's state-owned financial institutions have substantially improved their competitiveness and increasingly expanded their international influence. The top four state-owned banks are now all among the Top Ten banks worldwide in terms of market capitalization, and the Bank of China and the Industrial and Commercial Bank of China have both entered the ranks of global systemically important banks. Today in the international financial arena we can hear "China's voices" and feel "China's power". For this Huijin has made important contributions.

Pushing forward reform and innovation and building modern corporate governance. Establishing a sound corporate governance structure is the key to the joint-stock reform for state-owned commercial banks. Huijin has, in accordance with market principles, established agency relationships, pushed forward the establishment of modern enterprise system, and built the modern corporate governance structure based on "General Meetings of Shareholders legally exercising rights, the Board of Directors making strategic decisions, the Board of Supervisors legally conducting supervision, and senior management managing as authorized".

Huijin has focused on bringing into play the role of "proactive shareholders", paid close attention to how institutions it has controlling or other stakes in have implemented national economic and financial policies and risk management, thereby pushing forward the healthy and robust development of those institutions. Huijin created a dispatched director system to support directors in performing their duty in a full-time, independent, professional, and objective manner. This has promoted scientific decision-making by the Boards of Directors and has established bridges and links of communication between state-owned shareholders and financial institutions. During this process, Huijin has actively explored effective ways for state-owned shareholders to exercise their rights so as to avoid absence, offside, or dislocation in the process of exercising rights, and achieved the effective combination between market management means and state-owned asset management.

Being mindful of overall national situation and working to ensure financial security and stability. Finance is the heart of modern economy, the lifeblood of national economy, and an important component of the socialist market system. As a link between government and market, Huijin has made flexible use of foreign exchange reserves, market financing, lower dividend payout ratios, and other ways to add capital for state-owned financial institutions so as to strengthen state control over the financial lifeline.

By pushing forward state-owned financial institutions significantly improving their operations and profitability, Huijin has preserved and increased the value of state-owned financial assets, enriched national financial resources, and enhanced state regulation and control of the macroeconomy. In the wake of the international financial crisis, international investors resorted to self-help by reducing their holdings in Chinese financial institutions. Huijin made decisive decisions to purchase Chinese banks' shares in the secondary market in order to boost market confidence and maintain the stability of capital markets and financial security. Thanks to Huijin's important role, China's financial industry has continually strengthened its support for bottlenecks and weak links, and their ability to serve the real economy and social development has significantly improved.

Scientifically and rationally building up presence to build a diversified financial sector. Since its founding, Huijin has pushed forward financial institutions rationally building up presence, optimized state-owned financial asset allocations, and created a good financial market environment. Huijin has taken controlling and other stakes in 21 institutions, and its total assets account nearly half of the financial assets nationwide. The institutions that Huijin has injected capital into and has taken controlling and other stakes in include short-term retail savings banks, long-term investment and financing institutions, commercial financial institutions, as well as policy and development financial institutions.

This has effectively promoted the differentiated development of financial institutions and a diversified finance sector, and it also holds major significance for enhancing the financial system's overall efficiency and ability to support development. In 2007 Huijin made a USD20 billion capital injection into China Development Bank (CDB) to push forward CDB establishing a modern corporate governance structure and support CDB in giving play to its unique advantages in development financing and longer-term investment and financing and thus playing an important role in serving the national strategy and the reform task.

The Third Plenary Session of the 18th CPC Central Committee has made arrangements for deepening financial reforms and specified the requirements for enhancing the system for managing state assets and the financial market system. Huijin now faces new major tasks and development opportunities. The "Huijin Model" that has been formed with 10 years of exploration will continue its vigor and vitality in the new development stage. I sincerely wish Huijin success in making new progress to better perform its duty as an investor representative for state-owned financial assets and make greater contributions to the financial reform and development in China.