Guangxi Yuchai Machinery, an indirect subsidiary of Singapore-listed Hong Leong Asia, has been included by the US government in its so-called “Unverified List”.
Guangxi Yuchai is a subsidiary of New York-listed China Yuchai International. It specialises in building diesel engines. Hong Leong Asia is the manufacturing and building materials holding company of the Kwek family.
The Unverified List is maintained by the Bureau of Industry and Security in the US Department of Commerce.
While most of the dozens of companies in the list are from China, they come from other countries such as Armenia, Canada, Switzerland and Singapore as well.
According to Reuters, companies are added to the unverified list because the US could not complete on-site visits to determine whether they can be trusted to receive sensitive technology exports from the US.
US inspections of Chinese companies require the approval of China's commerce ministry.
“The company understands that an entity’s listing on the Unverified List does not mean that US exporters cannot engage with the parties listed,” says China Yuchai on Oct 16.
“Rather, the US exporters will have to conduct additional due diligence to verify end use or end users of final products before exporting the goods,” adds China Yuchai.
China Yuchai “understands” that its Guagnxi Yuchai has been proactively addressing the matter and that as at Oct 16, Guangxi Yuchai’s business is operating normally with no major supply chain impact, says China Yuchai.
See also: A diplomatic winter?
China Yuchai’s US quoted shares closed at US$7.05 on Oct 16, down 2.49% for the day and down 48.39% year to date.
Hong Leong Asia shares closed at 69 cents on Oct 16, unchanged for the day and down 19.41% year to date.