Reply #47: Growing nationalist backlash in China against foreign acquisitions: report

[54anickel]

http://news.yahoo.com/s/afp/20060410/bs_wl_afp/chinaeconomymergerinvest_060410045349;_ylt=ArC6yez3dDiXaXF9F1XmwvGmOrgF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--

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A broad coalition of officials and businesspeople have voiced concern that massive sales of China's assets could lead to foreign monopolies in key sectors, the China Daily Business Weekly newspaper reported.

"If China lets multinationals' malicious mergers and acquisitions go ahead freely, China can only act as labor in the global supply chain," said Li Deshui, China's former chief statistician, according to the paper.

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It cited plans by US fund Carlyle Group to acquire Xugong Group, China's largest construction equipment maker, for three billion yuan (370 million dollars), in the nation's largest private equity buyout yet.

The deal has stalled, and people familiar with the situation suggested the commerce ministry was refusing to approve it unless Carlyle promised not to sell its majority stake to another foreign group in the future, the paper said.

If the new less welcoming sentiment persists, it will happen at an awkward time in China's growing economic interaction with the rest of the world.

Many foreign investors now prefer acquisitions of existing Chinese enterprises rather than Greenfield investments, where operations have to be built from scratch, because it saves time.

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