China North Industries Group (NORINCO (G))
Add: No.46 Sanlihelu, Beijing China 100821
NORINCO was created in the early 1980's as the export arm of the Fifth Ministry of Machine Industry (5MMI); in 1982, 5MMI was renamed the Ministry of Ordnance Industry. NORINCO was "corporatized" in 1988 as the China Ordnance Industry Corporation (COIC), but due to name recognition issues, the name NORINCO remained in use (or alternatively, the NORINCO Group.) As part of another reorganization, in 1998 and 1999 COIC was divided into two entities, the China Ordnance Industry Group Company and the China Ordnance Equipment Industry Group Company. However, NORINCO remained one of the export arms of the two new entities.
NORINCO is a state-owned enterprise lawfully incorporated in China and operates according to law. Apart from its legitimate business in conventional weapons and military equipment, the corporation is also actively engaged in the manufacturing and trade of civilian products, and has developed a global trade and information network, and a diversified international market. NORINCO(G) is sometimes referred to as the Ordnance Industry Group. China North Industries Group, NORINCO (G), had over 300 subelements including factories (157 medium to large factories), research institutes, and trading companies. It established over 100 joint ventures and had more than 20 overseas offices and 60 branches.
By the end of 2012, NORINCO GROUPís total asset was close to 290 billion yuan, while the employees totaled 279,600. In 2013, the operating income and the profits of NORINCO GROUP reached 381.2 billion yuan and 10.05 billion yuan respectively. NORINCO GROUP ranked 161th in the list of 2013 Fortune Global 500. There were 46 member units under NORINCO GROUP altogether mainly distributed in several provinces, autonomous regions and municipalities in China, including Beijing, Shaanxi, Gansu, Shanxi, Hebei, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Shandong, Henan, Hunan, Hubei and so on. There are dozens of overseas branches established all over the world.
It is worth emphasizing that the factories are subordinate to NORINCO(G), not NORINCO. NORINCO(G) has departments which manage its subordinate factories. NORINCO, now, as before, is an import-export trading company which markets products of NORINCO(G) factories. This kind of structure is found in all the defense corporations directly subordinate to the State Council
The China North Industries Group Corporation (CNGC) main business is supplying products for the Chinese military. It also develops high technology civilian use machinery, chemicals, construction machinery, and other products.
China North Industries Group Corporation is a state-owned extremely large group established by the State Council as an organization whose investment is authorized by the state government,it operates in the way of a state-holding corporation and is managed by the central government.CNGC has underneath 131 owned or holding enterprises,companies and research institutions,such as China North Industries Corporation(NORINCO),the Inner Mongolian No.1 Machine-building Group Corporation and the North Industries Group Finance Corporation etc. It Had 456,000 employees and a registered capital of 25.4 billion RMB.
CNGC persists in the fundamental principle of basing on the defense engagement and actively dedicating all its efforts to China`s national defense modernization.With the approval of the government,CNGC undertakes the mission to conduct the research and development,and the manufacturing of various defense products as tanks.armored vehicles,artillery guns and shells,missiles,bombs,explosives,fuzes and pyrotechnics , propellants,optical products,electronic and photoelectronic products,information and control products,night vision equipment,antichemical devices,and simulation and training equipment etc. It also undertakes research and development of high-tech defense equipment in the fields of precision strike,amphibious operation,indepth neutralization, air defence,antimissile,information and night vision,high-efficient destroy and damage, for the land,navy and air forces as well as for the strategic rocket force.
CNGC firmly implements the principle of combined development of military and civilian businesses and the strategy of vitalizing the country by developing science and education. It dedicates all its strength to the peaceful utilization of defense technologies, to the development of high and new technlolgies and products urgently needed by the national economy and the people`s livelihood,and to the promotion of modernization of the national economy.CNGC possesses civilian product and technology capabilities that cover the three main national economy fields of machinery,chemical and electro-optics industries, and enjoys strong and abundant power in the development of heavy vehicles,engineering machinery,driving transmissions,special chemicals,engineering explosions,construction materials,information and control, and materials engineering etc.
CNGC firmly sticks to pursuing the fundamental national policy of opening to the outside world and dedicationg all its efforts to promoting the international cooperations and exchanges in the military-to-civilian transformation. It had already established sound cooperative relationship with various large companies in the world in the military-to-civilian transformation field,and set up more than 80 overseas economic and trade offices and branches in over 30 countries and regions.
NORINCO GROUP has actively responded to the spirit of the 18th National Congress of the Communist Party of China (CPC) and the third plenary session of the 18th CPC Central Committee. It gives full play to the marketís decisive role in resource allocation, and insists on the concept that technological level decides market position and market position decides corporate standing. It has accumulated strengths in capital, technology, talent and culture at the same time, adapted to the market, exerted the power of mechanism and cultivated the force of culture. It adheres to technological and management innovation as the fundamental driving force, pursues pragmatic and open development integrating military and civilian technologies, and takes political, economic and social responsibilities into comprehensive considerations.
Based on these efforts, NORINCO GROUP has made marvelous achievements. It has been rated as Class-A State-owned Enterprise (SOE) and ranked among the top SOEs for 10 consecutive years since 2004. With RMB 381.2 billion revenues from main businesses in 2013, it ranked 152nd in the 2014 Fortune Global 500 list, 23rd in the China Top 500 Enterprises list, and 6th in the China Top 500 Manufacturers list, maintaining its leadership among Chinese military corporations. Through the world-renowned platform of Airshow China, NORINCO GROUP wishes to display the deepened reform and rapid development of Chinaís weapon industry to both domestic and foreign friends, and to communicate and discuss cooperation with partners from around the world.
Facing the world and the future, CNGC takes the science and technology advancement and the future new ideas bringing forth as its basic philosophy. It is willing to carry out comprehensive economical and technical cooperations and exchanges with friends of the world, to promote the cause of peace, progress and prosperity of the human society,and to create a more bright future with common efforts.
The period 1990 to 1999 was the most difficult period of production and operation in the history of the weapons industry. With the strong support of various national policies, the weapons industry has actively changed its mind and explored new ways to turn around losses and solve difficulties. With the focus on transforming business management mechanisms, it actively adjusted stock assets, optimized asset allocation, and implemented strategies for large companies and large groups; comprehensive strengthening Enterprise management, promote management innovation, and ask for benefits from management. After 10 years of hard work, changes in the weapons industry's thinking, material accumulation, talent base, and institutional mechanisms have laid an important foundation for the rapid and rapid development afterwards.
On May 9, 2003, the US government imposed sanctions on China North Industries Corporation (NORINCO) and its subsidiaries, alleging that it had "materially contributed" to Iran's program to develop missiles capable of delivering weapons of mass destruction (WMD).
Yin Jiaxu, Norinco's vice president and a Chongqing Municipality delegate to the 11th National People's Congress, said on March 8, 2012 in Beijing that Norinco will continue to push forward the modernization of China's defense system, as per instructed in Premier Wen Jiabao's 2012 government work report. In the report, Wen called for further military modernization and the access to first-class weaponry essential for the People's Liberation Army's (PLA) capabilities. "National defense is the backbone of a country's integrity," said Yin. He said Norinco has always maintained the commitment of supporting China's defense industry and efforts to safeguard the country.
However, Yin said the spending increase will "first of all raise servicemen's living standards" and "making necessary supplement to the military's combat capabilities." He said China's military power still lags behind that of some Western countries. In 2011, China's military expenditures represented 1.3 percent of the country's GDP, compared to over 2 percent for both the U.S. and the U.K. "Norinco's business revenue reached 300 billion yuan (US$47.54 billion) in 2011, and we expect the figure to rise to 500 billion (US$79.23 billion) during the 12th Five-Year Plan (2011-15)," said Yin, referencing expansions to the country's emphasis on national defense.
China planned to increase its defense budget to 670 billion yuan (US$106.4 billion) in 2012, an 11.5 percent rise year-on-year. The increased budget will also help to upgrade China's weapon system so as to "cope with information warfare and potential future regional warfare," said Yin, adding that designing and manufacturing sophisticated weapons is a top priority task for China as well as Norinco. He said because China has vast territories, and maintaining an effective defensive force is essential to "safeguard China's economy." Despite the rate of increase in its military spending in double digits, Yin said the base number is still small, so the "increase wasn't substantial, and doesn't need excessive interpretation."
In addition to military equipments, Norinco also produces products for civilians. As is with most weapons manufacturers, peacetime overcapacity one of Norinco's major concerns. "The peaceful use of military technology has been one of Norinco's major dedications," Yin said. "Especially during peacetime," because despite its unique, ordnance manufacturer isn't exempted of market competition.
Contrary to popular belief, ordnance makers in China still must bid for government contracts, said Yin. He explained that China does not publish information in this regard due to confidentiality implications. "But companies need to obtain system certification before they can join the biddings. It's similar to the U.S. practices." The bidding system will only help ensure technology advancement, said Yin, who has noted in certain fields, China's military technology is "neck to neck" with the world's best.
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