I. Background and Objectives

As an international company operating across multiple fields and industries, Weichai (hereinafter referred to as the "Company" or "we") takes "Tech Empowered, Future Equipped" as its mission and "to build a world-class multinational high-end equipment group with leading technology and green development" as its vision, and has established a sustainable development system architecture with Weichai characteristics.

Weichai attaches great importance to the impact of its own operations and its supply chain on the environment, society, and economy, and is fully aware of the importance of building a sustainable supply chain to promote the sustainable development of the industrial chain. The Company requires suppliers (including contractors) and others to comply with all applicable laws and regulations in the countries/regions where they operate, as a prerequisite for cooperation with the Company; Suppliers (including contractors) are encouraged to benchmark against industry best practices and continuously improve their sustainable development management. Through the implementation of the Weichai Supplier Conduct Code (hereinafter referred to as the "Code"), the Company hopes to regulate cooperation with suppliers (including contractors) from aspects such as environment, society, and governance, and jointly commit to supporting Weichai's reputation and the core values of its brands.

II. Scope of Application

This Code applies to all partners (including but not limited to suppliers, contractors, service providers, distributors, etc.) providing products or services to Weichai and its domestic and overseas subsidiaries, as well as all employees (including full-time employees, part-time employees, dispatched workers, interns, etc.). Signing this Code indicates that the supplier is aware of all contents of this Code and shall, during its business relationship with Weichai, strictly conduct business in accordance with the applicable laws and regulations and the principles stipulated in this Code. We encourage suppliers to urge their upstream suppliers to jointly comply with this Code.

III. Principles and Statements

Weichai has the right to conduct on-site audits of suppliers to evaluate their ESG management performance and compliance with this Code. Weichai integrates ESG performance into the whole process of supply chain management, including full lifecycle management encompassing supplier audit, admission, selection, routine management, risk assessment, performance evaluation, and exit. Priority will be given or procurement shares will be increased under appropriate circumstances for suppliers that: formulate and articulate sustainable development values and commitments; Suppliers that adopt internationally recognized management systems and guidelines related to sustainable development, including but not limited to ISO 9001 quality management system, ISO 14001 environmental management system, ISO 50001 energy management system, ISO 45001/OHSAS 18001 occupational health and safety management system, ISO 26000 guidance on social responsibility, or other equivalent system certifications.

We will ensure supplier conduct compliance through regular reviews, and take corresponding measures against non-compliant suppliers, including reducing procurement shares and terminating cooperation. We will continuously provide special training for internal procurement and related personnel to ensure the effective implementation of this Code and various ESG management requirements.

IV. Content and Detailed Rules

(I) Compliance with Laws and Regulations

Weichai commits to strictly complying with the laws and regulations of relevant countries and regions in all business activities, and expects suppliers to urge their upstream suppliers to jointly comply as well.

Suppliers and their upstream suppliers must strictly comply with all relevant laws and regulations in the countries and regions involved in conducting business with Weichai, including but not limited to labor employment, anti-corruption, anti-bribery, fair competition and anti-monopoly, environmental protection, trade secret and intellectual property protection, data protection, export controls and economic sanctions, and China's anti-foreign sanctions, and meanwhile suppliers and their upstream suppliers should respect and endeavor to make their business practices consistent with universally recognized international practices.

(II) Labor Management

Suppliers and their upstream suppliers shall strictly comply with all applicable labor employment-related laws and regulations, conform to international labor practices and principles, the Universal Declaration of Human Rights, international treaties accratived by the Chinese government, and recognized ethical standards, respect and guarantee the lawful rights and interests of employees, create a healthy and safe working environment, ensure the absence of forced labor, child labor employment, human rights violation, discrimination, harassment and other behaviors, and be able to respond to Weichai's assessment requests in a timely manner and provide supporting evidence meeting such requirements.

1. Human Rights

Suppliers and their upstream suppliers shall comply with all applicable laws and regulations concerning working hours, wages, benefits, minimum age, working conditions, and labor relations, including but not limited to signing employment contracts, guaranteeing employees' basic rights, paying remuneration on time and in full, and creating a favorable working environment.

2. Anti-Harassment and Abuse

Suppliers and their upstream suppliers shall ensure that violence, corporal punishment, or other forms of physical, sexual, psychological, or verbal harassment or verbal abuse are not used as means to discipline or control employees.

3. Prohibition of Forced Labor and Child Labor

Suppliers and their upstream suppliers shall not use forced labor for any reason or in any form, and shall not employ any category of forced labor, including compulsory labor, bonded labor, indentured labor, or child labor. Any form of slavery and/or human trafficking or other similar situations is strictly prohibited.

4. Anti-Discrimination

Suppliers and their upstream suppliers shall adhere to equal employment principles, shall not engage in discriminatory practices based on gender, age, region, educational background, religious belief, nationality, race, sexual orientation, disability, etc., and shall provide equal employment opportunities for all employees. Employees shall be treated fairly and with dignity and respect, and diversity and inclusion shall be encouraged.

5. Freedom of Association and Collective Bargaining

Suppliers and their upstream suppliers shall respect employees' rights to choose to form and join trade unions and to engage in collective bargaining, and shall protect employees from discrimination, harassment, coercion or retaliation for exercising their rights to form, join or refuse to join trade unions and to engage in collective consultation.

6. Living Wage Commitment

Suppliers and their upstream suppliers shall commit to strictly complying with all laws and regulations regarding wage payment in the countries and regions where they operate, ensuring that the wages paid to employees are no lower than the local minimum wage standard and can meet employees' basic needs.

Suppliers and their upstream suppliers shall commit to paying wages to employees on time and in full, without any delay, withholding or unjustified arrears.

Suppliers and their upstream suppliers shall establish an internal supervision mechanism to regularly conduct self-inspection on wage payment. The inspection shall cover aspects such as the accuracy of wage calculation, the compliance of payment timing, and the completeness of pay slips. An internal reporting channel shall be established to encourage employees to report violations in wage payment, and strict protection shall be provided to whistleblowers.

(III) Health and Safety

Suppliers and their upstream suppliers must comply with all applicable health and safety laws and regulations as well as the health and safety-related policies of the Company to ensure the health and safety of employees.

Suppliers and their upstream suppliers shall provide employees with a healthy and safe working environment, take measures to prevent hazards and accidents in the workplace, and provide safety guarantees for employees to prevent accidents in the workplace.

Suppliers and their upstream suppliers shall provide employees with effective personal protective equipment that complies with national or industry standards to ensure employees' personal safety at work and prevent occupational diseases.

Suppliers and their upstream suppliers shall establish a health and safety management system, set health and safety objectives, continuously monitor and improve health and safety performance, take effective measures for accident prevention and emergency plan formulation, and provide guidance to employees to minimize health and safety risks and impacts. Weichai encourages suppliers and their upstream suppliers to obtain ISO 45001 or other equivalent system certifications.

(IV) Business Ethics

1. Anti-Corruption and Anti-Bribery

The behavior of suppliers must comply with all applicable anti-corruption and anti-bribery laws and regulations. In accordance with Weichai's zero-tolerance policy on corruption and bribery, suppliers shall not engage in or tolerate any conduct that may be construed as corruption or bribery.

Suppliers shall not directly or indirectly offer, solicit, pay or accept any form of illegal benefits for the purpose of obtaining improper business benefits, including but not limited to bribes, kickbacks, secret commissions, rewards, discounts, cash, gifts, loans, employment, facilitation payments or other things of value (benefits).

Suppliers shall formulate anti-corruption and anti-bribery compliance policies and systems and ensure the implementation thereof. In the process of cooperating with Weichai, if suppliers discover any acts of offering, accepting or soliciting bribes, they shall immediately lodge a complaint or report.

Suppliers shall regularly provide anti-corruption and anti-bribery training for all employees to maintain a healthy, safe and efficient working environment; Anti-corruption and anti-bribery audits shall be conducted regularly in light of actual needs to ensure the effective implementation of policies and systems.

2. Fair Competition and Anti-Monopoly

Suppliers shall engage in fair competition, comply with all applicable anti-monopoly and anti-unfair competition laws and regulations, and commit to maintaining a fair competitive market environment.

Suppliers must avoid reaching any understandings or agreements with their competitors or business partners that may impede competition, shall not monopolize prices or manipulate bids through bid rigging, collusive bidding, etc., and shall not restrict transactions, refuse to deal, restrict investment, or restrict the development of new technologies through agreements.

Suppliers shall obtain business opportunities through fair competition, and shall not hinder the normal operations of other competitors or obtain improper benefits through misleading, false propaganda or the use of technological means.

Suppliers must ensure that any declarations, statements, or other information provided to weichai are true, accurate, and complete.

3. Trade secret and intellectual property protection

Weichai may share confidential information and intellectual property-related information with suppliers during business activities. When handling weichai's confidential information, suppliers shall comply with the confidentiality clauses signed by both parties and take appropriate measures to protect weichai's confidential information from unauthorized disclosure, theft, or abuse.

Suppliers shall ensure that they do not infringe upon others' trade secrets and intellectual property rights in their daily operations, and shall take appropriate measures to ensure that the business cooperation with weichai does not infringe upon any person's intellectual property rights or confidential information.

Suppliers must handle weichai's intellectual property in the same manner, specifically protecting it against infringement such as unauthorized disclosure, theft, or abuse.

4. Privacy and data protection

Suppliers shall comply with all applicable privacy and data protection laws and regulations, including the cybersecurity law of the people's republic of china, the data security law of the people's republic of china, and the personal information protection law of the people's republic of china, strictly protect trade secrets and personal information obtained during the cooperation process, and shall not use any technological means to steal confidential information. In addition, suppliers shall formulate relevant data protection policies, adopt data protection measures, ensure information security, and prevent leakage or improper use.

5. Trade compliance

Weichai formulates comprehensive trade compliance rules and establishes a trade compliance system to ensure that its business operations comply with the requirements of relevant trade compliance laws and regulations. To ensure the compliant conduct of business, weichai expects suppliers to likewise comply with the trade compliance laws and regulations of the countries and regions applicable to their business operations, including export controls, economic sanctions, and china's anti-foreign sanctions, understand the applicable trade compliance laws and regulations, establish a trade compliance organizational structure and trade compliance rules, conduct risk assessments on proposed and ongoing business operations, strictly prohibit any business operations that violate relevant trade compliance laws and regulations, and ensure that cooperation with weichai and the products provided to weichai comply with all applicable trade compliance laws and regulations.

6. Whistleblowing management and whistleblower protection

Suppliers shall provide complaint and whistleblowing channels, establish a whistleblower protection system, and ensure that employees and stakeholders can report and complain about illegal, irregular, or misconduct behaviors to the company and competent government authorities, thereby safeguarding their lawful rights and interests.

(v) Addressing climate change

1. Climate risk management

Suppliers shall actively identify and assess the potential impact of climate change on their business activities, including climate risks and opportunities in procurement, production operations, sales, and other links, and formulate response strategies to ensure the stability and continuity of the supply chain.

Suppliers shall actively participate in weichai's climate change actions and jointly promote the establishment of a long-term mechanism for addressing climate change risks.

2. Carbon management

Suppliers shall actively carry out carbon emissions management, build a carbon management system, set carbon reduction targets, formulate carbon reduction pathways, actively participate in the research and development and applications of green and low-carbon technologies, cooperate with weichai's value chain decarbonization work, and promote the green transformation of the industrial chain.

(VI) Environmental management

1. Environmental protection

Weichai is committed to environmental protection, actively assumes corporate responsibility, and pursues sustainable development of its business. Meanwhile, weichai expects suppliers to adhere to the same principles of environmental protection as the company during their operations and reduce environmental burdens.

Suppliers shall comply with all applicable environmental codes, laws, and regulations related to their business operations, and ensure that they obtain and hold all environmental permits and registrations required for their business operations.

Suppliers shall implement an effective environmental management system, conduct internal environmental management inspections, continuously monitor and improve environmental performance, proactively adopt strategies such as reducing waste gas, wastewater, non-hazardous waste, and hazardous waste, protecting resources, and preventing ecological damage, and minimize the negative impact of operations, products, and services on the environment.

Suppliers shall formulate environmental protection strategies in business links such as production and operations, conduct environmental assessments, report relevant environmental data to competent authorities in accordance with legal requirements, and resolutely stop and report behaviors that violate environmental protection laws and regulations.

Suppliers shall comply with the requirements of laws and regulations related to biodiversity conservation, take measures to protect ecological environments and resources such as forests, water bodies, and land, and avoid and reduce the impact of operations on biodiversity.

2. Water resource management

Suppliers shall formulate clear, comprehensive water resource management policies that comply with local regulations, and clarify the importance of water resource protection and rational utilization. Suppliers shall, based on their own business characteristics and local water resource conditions, set specific, measurable, and achievable water resource management objectives, implement water resource management plans, record and monitor water sources, use, and emissions, and seek opportunities for water conservation and channels for pollution control. All wastewater shall be monitored, controlled, and treated as necessary prior to discharge or disposal. Suppliers shall routinely monitor the performance of their wastewater treatment and control systems to ensure optimal performance and regulatory compliance.

3. Material compliance and conflict minerals

Weichai is committed to complying with laws, regulations, and customer requirements regarding prohibited and restricted substances, including hazardous substances and conflict minerals. Accordingly, suppliers shall ensure that the goods provided to Weichai comply with all relevant laws and regulations concerning the scope requirements for prohibited or restricted substances. Suppliers shall implement policies regarding conflict minerals and conduct due diligence to confirm the origin of minerals; Respond to Weichai's requests without delay and provide evidence meeting these requirements.

4. Circular economy

Suppliers shall actively practice the concept of circular economy and advocate the efficient use and recycling and regeneration of resources. Suppliers shall actively optimize production processes, prioritize environmentally friendly technologies and processes, and promote resource recycling.

(VII) Product safety and quality

Suppliers shall ensure that their operations comply with relevant national and international laws and regulations, industry standards, and certification requirements, such as ISO 9001, IATF 16949 quality management system standards, and product safety certification.

Suppliers shall establish a sound internal quality control system to conduct strict quality inspection on raw materials, production processes, and finished products. At the raw material procurement stage, each batch of raw materials shall be inspected to ensure compliance with quality standards; During the production process, critical quality control points shall be established, and sampling inspection shall be conducted on semi-finished products to identify and rectify quality issues in a timely manner; Before finished products leave the factory, a comprehensive final inspection shall be conducted to ensure that the products fully meet safety and quality requirements. Meanwhile, suppliers shall retain detailed inspection records for review by Weichai at any time.

Suppliers shall establish an emergency communication mechanism for emergencies that may affect product safety and quality (such as sudden changes in raw material quality, major issues in production processes, and serious quality defects in market feedback). Once such a situation occurs, suppliers shall notify Weichai without delay (no later than 8 hours) and provide a detailed incident description, preliminary cause analysis, and emergency measures taken. Weichai will respond promptly, form an emergency response team jointly with the supplier, formulate a solution, and minimize the impact on product safety and quality.

v. implementation of this code

Suppliers shall take appropriate measures to ensure that the spirit of this Code has been communicated to, adopted by, and applied across their employees and the entire supply chain (including suppliers, subcontractors, and business partners participating in the provision of products and services to Weichai) (as applicable). Suppliers shall provide relevant information promptly and in good faith to prove their compliance with this Code.

This Code shall take effect and be implemented as of the date of issuance. Weichai shall review this Code at least annually and revise and update this Code in a timely manner based on changes in national laws, international conventions, and other factors.