Part C: Report of COSCON, a pilot unit of sustainable development of COSCO

Labor relations ---Training and education

a) Talent selection based on scientific evaluation and judgment

The company thinks much of the construction and innovation of the assessment system, having gradually formed a set of assessment methods coinciding with the characteristics of shipping after years' of development. The innovative evaluation method of 360-degree omnidirectional assessment was launched for the annual assessment of employees. The result of the assessment has been taken as one of the important proofs for employee promotion or demotion as well as the important standard whether to extend the contracts with the employees or not, sufficiently attaching importance to the annual year-end assessment result.

The company insists on mass route in talent selection, taking cadres' competition for a position as the breakthrough to expand the selecting channel. Through this way, a batch of young cadres with genuine abilities and knowledge assumed the leading posts such as the Director of Research Center (Legal Division), Deputy Director of Shipbuilding Center, and Undersecretary of Corporation Publicity/Enterprise Culture Department, etc.

b) Enhancement of employee training and improvement of human resource quality

Our company insists in believing that the employee team is the foundation for its continuously stable business. For years, it always considered the construction of the employee team as one of the most important long-term development plans. In order to cooperate with the business development, our company strives to provide professional training for the management team and attract capable professionals, devoting itself to the cultivation of a harmonious and aggressive work atmosphere to reach the interdependent relations with mutual trust.

Our company adopts multiple ways such as inviting-in and walking-out, etc. to arrange training for employees to improve the quality of human resources. Focusing on detaching levels and grasping emphases in training, the company chose and sent some employees to participate in the MBA education and the management training class held by COSCO, and arranged employees to take part in the positional skill training classes including the salesman training class and further education. The active training work enables the cadres and employees to apply what they learned from study to well promote the management and production of the company. See table below for the person-time of the employee training in 2005:

When well grasping the training work for the land employees, the company went about the training work for the seaman team without any hesitation to actively deploy training to continuously improve the comprehensive quality of seamen. The training contents include the cultivation and improvement of seamen's business skills, management abilities, knowledge on various regulations from home and abroad, English level, occupational moral and labor protection knowledge, etc.

c) Implementation of Positional Exchange & Cultivation of Inter-discipline Talents

In order to close the relationship between the administration and the port subdivisions, shipyard and basic levels, strengthen the service concept of employees, help employees from various departments know about each other, and accumulate & enrich working experiences to completely improve their overall qualities and management level to cultivate the inter-discipline talents, our company launched the employee positional exchange program. Total near 100 excellent cadres have been sent to participate in the on-board temporary positional practices, debarking temporary positional practices and mutual temporary positional exchange between the administration departments and ports, etc. In 2005, 15 potential excellent talents were selected as the targets for cultivation and sent to oversea branches for temporary work. During the half a year's temporary work overseas, they are tracked for management. At the same time, the expatriates overseas, who are capable in various aspects, were called back to the company and arranged on the posts with higher challenges that can bring their expatriate experiences into full play. Based on the abundant implementation of the positional exchange, a great number of inter-discipline talents are trained.

d) Standardization of Recruitment System and Cultivation of HR Exploitation

For the sake of the development of the company and the obtainment of various required talents in the appropriate time to continuously enrich it with new power, ensure the quality of the newly-recruited personnel and carry out the employment principle of openness, equality, competition and selection of best, our company always attaches importance to the construction of the system and made the recruitment system for introducing urgently required talents and graduates to provide reliable basis for talent selection. For years, our company has directly recruited graduates from domestic shipping academies, improving the quality and the status of the employee team to set a good foundation for the cultivation of shipping talents and offer a good guarantee for our company's sustainable development in future.

The annual average ratio between the number for employment and the one for registration is 1:5 while the accepting rate for our company's employment contract is 100%. Our company takes the policy of serving the society and employees, although it has experienced several reorganizations for its organizational structure, to allocate all the employees involved without any case of layoff yet. The matters related with the employees' employment and allocation will be always cared by the company in case that the situations of opening a business or going out of a business occur for the future development of the company.