SecProbe.io

CORRESP
1
filename1.htm

China Yuchai International Limited

CHINA YUCHAI INTERNATIONAL LIMITED

16 Raffles Quay #26-00 Hong Leong Building Singapore 048581

Tel : (65) 6220 8411 Fax : (65) 6226 0502

September 7, 2006

Via Edgar and Facsimile (1-202) 942-9636

United States Securities and Exchange Commission

Mail Stop 5546

100 F Street, N.E.

Washington, D.C. 20549

    Attention:

    Cecilia D. Blye

    Chief

    Office of Global Security Risk

    Peggy Fisher

    Assistant Director

    Division of Corporation Finance

    James Lopez

    Division of Corporate Finance

    Re:

    China Yuchai International Limited

    Form 20-F

    Filed July 15, 2005

    Response Letter Dated August 4, 2006 (File No. 1-13522)

Ladies and Gentlemen:

Set forth below is China Yuchai International Limited’s (“CYI”) response to the Staff’s comments in
Cecilia Blye’s letter dated August 18, 2006. For the Staff’s convenience, the Staff’s comments are
set forth before each response.

General

    1.

    We note your response to prior comments one and two. You state that the concerns about state
sponsors of terrorism in the U.S. and elsewhere are inapplicable to either CYI or its
affiliates. Please discuss the basis for your view, in light of the investor sentiment
evidenced by investor actions including, but not limited to, the legislative initiatives cited
in our prior comment two.

    1.

    CYI notes the Staff’s comment and respectfully submits that CYI does not believe that export
sales by its Chinese operating subsidiary, Guangxi Yuchai Machinery Company Limited
(“Yuchai”), to Cuba are material to its current, past or anticipated

    operations or represent a material concern for CYI’s investors, from either a quantitative
or qualitative perspective.

    In response to the Staff’s previous comments, CYI has already included the following
disclosure in its Form 20-F for the fiscal year ended December 31, 2005 (Item 4. Information
on the Company — Business Overview — Sales, Marketing and Services) relating to its export
markets (including Cuba) generally, as well as the memorandum of understanding signed on
March 31, 2006 between Yuchai, a Chinese export agency and representatives of the Cuban
Ministry of Transportation, in particular:

    “Vietnam, Saudi Arabia, Taiwan, Cuba and Kazakhstan (in descending order)
represented Yuchai’s top five export markets in 2005 in terms of number of
units. In particular, Yuchai exported 130, 510 and 339 diesel engine units
to Cuba in 2003, 2004 and 2005, respectively. In April 2006, Yuchai signed
a memorandum of understanding with the Cuban government for the export by
Yuchai of approximately 20,000 diesel engines over the next four years.
Yuchai does not expect that sales pursuant to this memorandum of
understanding will have a material impact on its unit production or sales
revenue.”

    However, the sales revenue contributed by exports to Cuba represented only 0.06%, 0.20% and
0.11% of Yuchai’s total sales revenue in fiscal 2003, 2004 and 2005, respectively. Given
the de minimis nature of the amounts involved, CYI does not believe that its export sales to
Cuba have constituted a material investment risk to its security holders. Accordingly, CYI
believes that no specific disclosure about this export data is required to be included in
its annual report on Form 20-F for the fiscal year ended December 31, 2005.

    CYI acknowledges that investor awareness in the United States and elsewhere has been
heightened in recent years regarding investment in companies which have dealings with state
sponsors of terrorism. However, given the de minimis nature of CYI’s dealings with Cuba,
CYI respectfully submits that it firmly believes that such concerns are inapplicable to
either CYI or its affiliates.

    2.

    We note your response to prior comment three and the data concerning North Korean sales by
Henan Xinfei Elelctric Co., Ltd. as a percentage of Xinfei’s total sales. Please discuss the
factors underlying your view that your indirect contacts with North Korea through Xinfei are
immaterial to you in quantitative and qualitative terms. In this regard, we reiterate our
request that you address specifically the impact Xinfei’ North Korean contacts may have on
your reputation and share value. Your expanded materiality analysis also should address the
relevance to you of the Xinfei unit and revenue data you supplied.

    2.

    The sales revenue contributed by sales to North Korea by Henan Xinfei Electric Co., Ltd.
(“Xinfei”), a subsidiary of CYI’s parent company, Hong Leong Asia Limited (“HLA”), for fiscal
years 2003, 2004 and 2005 represented only 0.14%, 0.78% and 0.77%, respectively, of Xinfei’s
total sales revenue in fiscal 2003, 2004 and 2005. The principal products which Xinfei
exports are household refrigerators, as well as other consumer electrical appliances. These
export sales by CYI’s sister company are

2

    immaterial in both quantitative and qualitative terms to CYI. Given the de minimis nature
of these sales consisting principally of consumer electrical appliances by a sister company
of CYI, CYI does not believe that these dealings are material to CYI or its share value, and
therefore do not require specific disclosure in CYI’s periodic filings.

    3.

    We note from public media reports that you have operations, sales or other contacts with the
Middle East and Africa. Please identify for us the countries in these regions where you have
operations or contacts. We may have further comment.

    3.

    CYI confirms to the Staff that a very small number of diesel engines manufactured by its
Chinese operating subsidiary, Yuchai, were exported by Yuchai to Turkey in fiscal 2005: 7
units of diesel engines for a total amount of US$28,135. In the current fiscal year, a
similarly small number of diesel engines have been exported by Yuchai to Turkey and Egypt.
There were no such sales to Egypt in fiscal 2005. CYI does not believe that these sales are
material to its current, past and anticipated operations or to its security holders.

If you have any questions or comments, please do not hesitate to contact Mr. Philip Ting Sii Tien
at (65) 6220 8411.

    Respectfully submitted,

    /s/  Philip Ting Sii Tien

    Philip Ting Sii Tien

Director and Chief Financial Officer

    cc:

    Ms. Sheila Murugasu, China Yuchai International Limited

Mr. Michael Sturrock, Latham & Watkins LLP, Singapore

3