Xiangyang, state-run, is the largest specialized automotive bearing manufacturer in China. Renamed from the Xiangyang Bearing Factory in 1993, it has over 5,000 employees producing 2,000 different types of bearings. Production capacity is approximately 25 million parts per year.

The company's product line includes CV joints, automotive hub assembly units, water pump bearings, air conditioning bearings, tapered roller and needle roller bearings, and clutch release bearings.

In 2000, Xiangyang reported a net loss, and again in 2001. 2001's loss was 56.1 million Yuan (USD $6.95 million).

Because of those losses, Xiangyang is now an ST or "special treatment" company on the Shenzhen A stock exchange. A special treatment company has had two consecutive years of losses, financial or operating irregularities, or has had its net asset value drop below the stock's par. The Shenzhen proscribes a +/- 5% daily limit on the trading range of ST stocks. Xiangyang faces delisting from the Shenzhen A if it does in fact report a loss for 2002.

Earlier this year, Xiangyang reported that, while its markets are improving, the company has been unable to take advantage of the situation. Lack of cash and working capital meant it has been unable to buy sufficient raw materials and components to maintain production or go after new business.

In August 2001, Xiangyang was implicated in a widespread accounting fraud investigation triggered by an investigation of its auditors.

In its latest report, Xiangyang denied reports of operating difficulties, said it will continue operating as-is, and that no restructuring or other changes will be made.

Xiangyang's shares recently traded at 4.58 Yuan, down 5% on the day.