The year of 2008 proved to be eventful in the development process of COSCON, in which we celebrated the 30th anniversary of COSCON, faced the severe challenges for operating costs and export commodities posed by the global inflation and successive grave natural calamities in China, as well as the economic winter of global financial crisis and rapid deterioration of liner shipping market.

Confronted with the unusual great changes in the economic environment, adopting the scientific outlook on development and taking differentiation competition strategy and low-cost strategy as the breakthrough, we have achieved outstanding operating performance and social benefits in the industry through rapid response, comprehensive collaboration, and integrated reform. We continued to hold the title of “National Civilized Unit”, ranked 21st in the Top 500 Chinese Informatization Enterprises, and won the Award for IT Governance. We have won the Green Flag Award of American Long Beach for the third time in succession, and the title of Annual Best Carrier of “Far East/Canada East Route” from CIFFA for the seventh time in succession, First Prize in the 6th China Freight Industry Award, the title of “Advanced Unit in Ideological and Political Work Among Central Enterprises” of 2008 granted by the State-owned Assets Supervision and Administration Commission of the State Council, and the title of “Excellent Unit in Cultural Construction Among Chinese Transportation Enterprises” granted by China Association of Communications Enterprises Management. In addition, the company won the “First Prize for Scientific Technology Granted by China Institute of Navigation” for the first time in the history of COSCO with its newly developed Vessel Global Monitoring System (COSCON-VGMS).

Facing the natural disasters including snowstorm in South China and Wenchuan earthquake, the employees of COSCON actively participated in the disaster prevention and relief activities without any hesitation, and donated a total of RMB 6.6175 million, USD 46,000, and HKD 109,700 for the Sichuan earthquake-stricken areas. In addition, the company donated more than RMB 30 millions in the forms of charity donation, free transportation of disaster relief materials, support for risk elimination of Tangjiashan Landslide Dam, and containers for post offices in earthquake-stricken areas. The domestic and overseas employees of COSCON also took active participation in the Beijing Olympic Games torch relay and voluntary activities. Last but not least, when the direct flights, shipping and postal services across the Taiwan Straits officially started, “COSCO Oceania” and “Yuan He” represented COSCO vessels to successfully break the ice for the first voyage of direct navigation across the Taiwan Straits.

We follow the management philosophy of rapid response and lean operation, and implement the cost accountability system in a comprehensive way. The company adheres to the principle of energy saving in operation, management and technology to control fuel costs. Through implementation of “vessel increase and speed reduction” or “virtual vessel increase and speed reduction”, close ship-shore collaboration, reduction in time of operation in harbor, real-time supervision on fuel consumption, and promotion of application of new energy saving technology, the annual fuel consumption has decreased by 0.12 million tons compared with the same period of last year while the average shipping capacity increased by 6.2%, and the annual fuel saving amounted to 0.468 million tons (excluding the factor of suspended shipping service).

We have enhanced the security responsibility awareness to improve the control over production security. Through the activities of “Safety Rules and Regulations Implementation Year” and “100-Day Supervision and Inspection of Production Security”, we have strictly carried out the work requirements of “Dual Responsibilities on the Same Position” and “Guarantee Security through Tough Measures” to further intensify the control over production security. As a result, the company has maintained a sound environment of production security without any grave security liability accident in the whole year.

We put the responsibility awareness into practice and strive to create a harmonious enterprise. The company has all along stuck to the principles of wholeheartedly relying on employees to operate enterprises, making enterprise affairs public, and effectively carrying out various work requirements of democratic management. We strictly implement the new “Labor Contract Law” to further safeguard the legitimate rights and interests of employees, and hold heart-warming activities to voluntarily help out poverty and disaster stricken employee families, with a total number of condoled poverty-stricken employees of 3,775 persons-time and a total amount of condolence money of RMB 2.1139 million in 2008.

The current financial and economic crisis is still spreading all over the whole world, far from bottoming out. Confronted with the crisis and difficulties, we will stand high and aim far, take a down-to-earth attitude, and refine our thoughts to deal with the crisis and difficulties composedly. Within the framework of ten principles of global compact, the company shall fulfill its social responsibilities in an all-round way, and work hard together with stakeholders to realize the comprehensive, coordinated, and sustainable development of economy, society and environment.

-- We will face up to the severe challenges posed by the global financial crisis, build more confidence, take more effective measures, spare no efforts to serve the global trade, and make due contributions to the recovery of the global economic growth and the safeguarding of open and free trade environment, on which basis we will increase sales and reduce costs to maximize development of the company and safeguard the legitimate rights and interests of stakeholders.

-- We will continue to actively echo the call from the Chinese Government and summarize the previous experience of success to, by means of reasonably arranging lines and vessel collocation, prolonging the offshore operation time of vessels, reducing the rotation speed of the marine diesel engine, adopting new technologies, etc., further reduce the fuel consumption by vessels, decrease greenhouse gas and carbon emission, minimize water pollution, and protect the ocean environment to construct a green family of the human beings through

-- We will continue to set a good example in abiding by the laws and disciplines, observing all international and domestic laws and regulations, faithfully fulfilling contract obligations, and carrying out honest and legal operation. We shall maintain moderate employment opportunity creation capability and realize the mutual development of company and employees to promote the social stability and harmony. Furthermore, we shall also take advantage of capital convergence and try our best to support education, health, humanistic care, culture & art, urban construction, and other projects in the local community, help to improve public environment of the community, and participate in the voluntary community activities.

As the saying goes, "Heaven and earth found their places; all living things were nurtured and thrived". The enterprises take an irreplaceably important role in the process of building harmonized society. We will tap on all the vitalities of labor, knowledge, management, capital and technology, and utilize the scale advantage to exploit all sources of material and spiritual wealth. Based on the basic principles of efficiency improvement, scientific development and harmonized coexistence, we will constantly strengthen our social awareness, accelerate technological advancement, and improve development quality as well as sharing economic and social development outcomes with people all over the world who support the harmonized development of the society, economy and nature.

Company General Manager: Sun Jiakang