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US Adds China Entities to Red-Flag Export List, WuXi Biologics Hit

Shares of WuXi Biologics plunge 25% after Commerce Dept adds 33 Chinese entities to its ‘unverified list’, which requires exporters to go through more procedures before shipping goods


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China's increased military spending can be used to safeguard the fruits of the country's economic development, analysts said. Photo: Reuters

 

The US Commerce Department said on Monday it had added 33 Chinese entities to its so-called ‘unverified list’, which requires US exporters to go through more procedures before shipping goods to the entities.

The department said it was taking the step as it was unable to verify the legitimacy and reliability of those entities in relation to their use of US exports. The entities included listed companies, universities, as well as aerospace and electronics suppliers.

WuXi Biologics saw its stock plummet more than 25% on Tuesday to wipe HK$77 billion ($9.9 billion) off its market value following the addition of its units in Wuxi and Shanghai to the list. Trade in its shares was later halted.

The maker of ingredients for vaccines including AstraZeneca’s Covid-19 vaccine said, however, that while it had imported manufacturing equipment subject to US export controls, Washington’s move had no impact on its business or ongoing services to global partners, it said in a statement in English posted on its website.

WuXi Bio was prevented by US export controls from reselling or re-exporting items purchased from the United States but the Commerce Department had been unable to conduct checks that WuXi Bio was in compliance due to the pandemic, WuXi Bio’s CEO Chris Chen told an investor call on Tuesday.

“Because of Covid-19, they have not been able to travel here in the last two years to verify us, so they have put us on this ‘unverified list’,” he said.

“The affected companies are only in Shanghai and Wuxi and our factories in Shanghai and Wuxi have already been built, so there is no longer any need to buy large amounts of hardware for bioreactors.”

The company’s lawyers plan to negotiate with the US Commerce Department, he added.

Shares in Hymson, a manufacturer of laser and automation equipment, also slid more than 7% after a unit was added to the list.

 

• Reuters with additional editing by Jim Pollard

 

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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