| I. 
                  International SHP training     The 
                    2003 TCDC (Technical Cooperation among Developing Countries) 
                    SHP Training Workshop was held from 9 Oct to 18 Nov 2003 by 
                    HRC. Attended altogether 37 participants from 24 countries, 
                    covering Asia, Africa, Latin America, Eastern Europe and Oceania. 
                    This is the first training workshop on SHP that HRC conducted 
                    since the establishment of HRC for so many participants from 
                    so many countries. 
 This training workshop which is the 
                    37th international SHP training workshop conducted by HRC 
                    was sponsored by Chinese Ministry of Commerce, as one of the 
                    technical collaborative projects among the developing countries. 
                    All the lodging, boarding, training, pocket money and the 
                    domestic transportation fees were borne by the Chinese government. 
                    That is part of the Chinese contribution to the South-South 
                    cooperation.
 
 In pursuing HRC's quality principle 
                    "excellence", improvements were made in many aspects 
                    for the training workshop. New study tour routes were developed 
                    and optimized including Qinshan Nuclear Power Plant and Chint 
                    --- the model of China's large private enterprise. Around 
                    95% of the lecturers used Power Point to give presentations. 
                    For the first time HRC provided for participants with a CD-ROM 
                    which contains the details of every participant, presentations 
                    of HRC lecturers, Hangzhou's scenic photos and one-hour long 
                    selected traditional Chinese music. Participants paid visit 
                    to the packaged hydropower units in Nanjing Hydraulic Research 
                    Institute and its Tiexinqiao Hydraulic Experimental Base which 
                    is China's largest hydraulic experimental base. The packaged 
                    hydropower units visited are appropriate for the energy supply 
                    to the farmers in the decentralized vast rural areas in the 
                    developing countries, and the equipment is reliable in operation 
                    and low in price.
 
 HRC's new lab and restaurant are being 
                    constructed in HRC and we believe that the participants in 
                    our upcoming training workshops on SHP will surely be able 
                    to make use of the better environment and facilities in HRC.
 
 In 2004 HRC plans to conduct two international 
                    training workshops on SHP. The TCDC training workshop on SHP 
                    Equipment planned will be implemented in Oct and Nov. The 
                    other TCDC training workshop on SHP multi-purpose development 
                    for African participants either in Sept or in June 2004 is 
                    now under consideration and it will be fixed by the end of 
                    Feb.
 II. International conferences
     1. 
                    Director of HRC, Dr. Chen Shengshui went to Japan to attend 
                    the 18th Sino-Japanese Conference on River and Dam Engineering 
                    and presented a paper titled "Featured Design for SHP 
                    Stations in China". Dr. Chen conducted discussions with 
                    Japanese experts on the hydro power informatization in the 
                    information era, water ecological recovery, water environmental 
                    protection and the prospect of hydro power science and technology, 
                    etc.     2. Ms. Cheng Xialei, 
                    Deputy Director of HRC, as one of the 52 experts of the Chinese 
                    delegation, participated in the Third World Water Forum, which 
                    was opened in Kyoto, Japan in March. She presented a paper 
                    titled "Water vs Rural Energy", introducing the 
                    achievements and experience in rural hydro power development 
                    in China, sharing the abundant experience and new ideologies 
                    on water resource development with the peers all over the 
                    world.      3. Invited by the 
                    World Bank officials, Mr.Li, Deputy Chief of International 
                    Cooperation, attended the International Workshop on Attracting 
                    PPSP in Infrastructure and presented a paper titled "Framework 
                    of China's Private Enterprises for Participation in SHP Development". 
                    The presentation was evaluated highly by the World Bank experts 
                    and leaders in Yunnan province government. With the implementation 
                    of opening and reforming policy in China, more private and 
                    more investors are now participating in the exploitation of 
                    SHP in China to meet the growing market demand.      4. HRC assisted 
                    the Chinese Ministry of Water Resources to conduct the promotion 
                    conference on international advanced water and power products 
                    on the internet in May. Altogether 48 items of water and power 
                    technology from 14 countries were promoted.     5. Contacts 
                    were made with the World Bank and ESCAP for jointly holding 
                    the international conference on small hydropower in the future. III. Global SHP cooperation
     1. 
                    The 5th Conference of Sino-Vietnamese Science and Technology 
                    Joint Committee was held on 18 March 2003 in Beijing, with 
                    the small hydropower development and SHP station automation 
                    system listed and approved by the Chinese Ministry of Science 
                    and Technology as the long-term cooperative project between 
                    China and Vietnam during the Conference. HRC has been designated 
                    as the implementation organization on the Chinese side.     As the renewable 
                    and environmentally sound energy playing an important role 
                    in poverty relief and global environmental protection, SHP 
                    development has drawn the attention from both Chinese and 
                    Vietnamese governments.     The objective 
                    of the project is to explore the mode of SHP development, 
                    SHP equipment and automatic system which are appropriate for 
                    the SHP situation in Vietnam with the aim to promoting the 
                    SHP development in Vietnam. The duration of the cooperation 
                    is three years (from May 2003 to May 2005). In Oct the agreement 
                    was reached and the contract signed. The automation lab is 
                    one of the items for SHP cooperation as jointly approved by 
                    the two sciences and technology ministries of China and Vietnam. 
                    The establishment of the lab will hopefully promote the wide 
                    application of SHP unmanned automation technology in Vietnam. 
                    
 2. The SHP 
                    technical cooperation with Powerbase of Canada was strengthened. 
                    In July, a Chinese delegation composed of Ms. Cheng Xialei, 
                    Deputy Director of HRC, Mr. Xu Jincai, Chief of the New-Tech 
                    R&D Center of HRC, and some other experts with the Zhejiang 
                    Provincial Department of Water Resources, paid a visit to 
                    Canadian partner Powerbase Automation System Inc., for discussing 
                    further cooperation on Automatic Control System for SHP. The 
                    kind cooperation between HRC and Powerbase dates back to 1996, 
                    when the advanced technology on the Unmanned Control System 
                    for SHP was introduced from Powerbase, as the implementation 
                    of one of the "948" projects consigned by the Chinese 
                    Ministry of Water Resources. The system was mainly developed 
                    for the hydropower stations connected to power grids. Being 
                    demonstrated, studied and indigenized, the technology has 
                    been applied and popularized in dozens of SHP stations nationwide 
                    with fruitful results. Moreover, with joint efforts, an upgraded 
                    simple automatic control system for the isolated SHP stations 
                    is developed successfully, with competitive advantages both 
                    in function and price.
 
 In order to further improve the SHP 
                    automation in China, HRC nd the Zhejiang Provincial Department 
                    of Water Resources applied together in 2003 for carrying out 
                    the "948" project entrusted by the Ministry of Water 
                    Resource, which plans to introduce the simple automatic control 
                    system from Canada, and demonstrate in Jinhua, Zhejiang province. 
                    It is expected that the pilot project will be installed and 
                    commissioned soon and put into operation earlier in 2004.
 
 3. HRC has 
                    undertaken the design and complete equipment supply for Corojo 
                    and Moa SHP stations in Cuba, both these projects belong to 
                    the Chinese aid programs to foreign countries. HRC dispatched 
                    two experts who stayed in Cuba for 9 months in assisting the 
                    equipment installation. More experts from HRC will be going 
                    to Cuba for technical assistance in 2004 when newly ordered 
                    electric equipment arrives in Cuba.
     4. In August, a 
                    group of 6 Indian members paid a visit to HRC. After the briefing 
                    on HRC and SHP in China, the Indian guests expressed keen 
                    interest in SHP training that HRC conducts every year for 
                    international participants and micro packaged units that Chinese 
                    manufacturers produce. Inquiries were addressed around the 
                    supply of micro packaged units and the related expenses on 
                    SHP training. The 6 members were at Hangzhou attending 2003 
                    Bamboo Cultivation, Processing and Production Seminar organized 
                    by UNIDO. India is a country badly in need of energy. In 2001-2002 
                    there was a shortage of energy by 7.5%.      5. HRC has completed 
                    the feasibility study for the Ulaanbaatar Power Storage Plant 
                    in Mongolia. This project is likely to be implemented when 
                    its electricity price is to be further negotiated by the Mongolian 
                    side as reasonable.      6. Invited by the 
                    Mongolian side, one HRC expert went to the northwestern part 
                    of Mongolia. Site trips were conducted to SHP resources, load 
                    demand, mode of SHP exploitation, installed capacity and development 
                    arrangement at the two villages. Preliminary comments have 
                    been presented to the Mongolian side in regard with SHP resources, 
                    load demand, mode of SHP exploitation, installed capacity 
                    and development arrangement. The Mongolian side expressed 
                    that survey work and collection of data concerning topography, 
                    geology, discharge, temperature, construction materials etc 
                    would be completed within two months, and the related data 
                    will be sent to HRC. Based on that, HRC will complete the 
                    feasibility study work.      7. During the visit 
                    paid to HRC in April by Mr.Polglase from Hydro Tasmania, a 
                    company specialized in hydro power international consultation 
                    with its headquarters in Australia, both sides conducted friendly 
                    and detailed talk on the containerized mini hydro technology 
                    and identified the work in the next phase. Also, the utilization 
                    of the latest renewable energy like wind power and battery 
                    technology were discussed. Meanwhile, information on the SHP 
                    investment both home and abroad was exchanged. The prospect 
                    for the bilateral cooperation was felt promising.     8. Cooperation 
                    with ESCAP was strengthened. Entrusted by ESCAP, HRC has submitted 
                    to ESCAP the paper titled "General Situation and Operation 
                    Mechanism for Private Enterprises to participate in Rural 
                    Hydropower Development" together with the "A Case 
                    Study of Chinese Private Enterprise Investing into Rural Hydropower 
                    Construction". IV. Information dissemination
     1. 
                    HRC continued to publish the two magazines, i.e. the bimonthly 
                    <Small Hydro Power> in Chinese and the quarterly <SHP 
                    News> in English, distributing to over 90 countries and 
                    regions.     2. HRC's homepage 
                    has been improved steadily and it received over 70,000 clicks 
                    during the year, becoming the window of HRC to the outside 
                    world. More columns of the homepage will be developed so that 
                    more exchange among the SHP peers worldwide could be realized.     3. The book titled 
                    "Rural Hydropower and Electrification in China" 
                    was completed and the printing will be finished in Feb 2004. 
                    It gives a comprehensive and in-depth introduction to the 
                    main experience and technology of rural hydropower and electrification 
                    in China, as a reference for global colleagues working in 
                    the hydropower sector. It is a valuable attempt in international 
                    SHP exchange and Mr. Suo, the Vice Minister of Water Resources 
                    took pleasure to write the preface for the book.      4. All together 
                    28 technical papers by HRC staff were published domestically 
                    and internationally during the year, much more than the previous 
                    year. V. Certification for ISO 9001:2000   
                    Quality System
     The 
                    working group with the China Quality Certification Center 
                    undertook the on-site examination & approval on three 
                    independent certification systems respectively for National 
                    Research Institute for Rural Electrification, Hangzhou Yatai 
                    Hydro Equipment Completing Co. Ltd. and Hangzhou Yatai Supervision 
                    & Consultation Co. Ltd. The examination was focused on 
                    the capability for realizing the quality principle and the 
                    quality objective, as well as the competence of continuous 
                    improvement; the reliability for the inner checking; the accordance 
                    between the concrete implementation and the ISO9001:2000 standards 
                    & the quality management system document and the implementation 
                    validity of the quality management system.      It was concluded 
                    by the working group that, HRC is recommended for certification 
                    after the on-site examination & approval and with the 
                    rectifying measures & effective implementation. The rectifying 
                    measures concerned are to be taken recently, and the certification 
                    will be soon completed successfully.
 
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