The purchase of Hummer by Sichuan Tengzhong Heavy Industrial Machinery Co. Ltd. may turn out to be OK with Chinese regulators. And then on the other hand, it may not.
That's our take on a Wednesday
Reuters story with the optimistic headline "Chinese agencies back Tengzhong-Hummer deal."
As you'll recall, General Motors Co. in June signed a memorandum of understanding to sell the brand to Sichuan Tengzhong, a private Chinese company with no experience in auto-making. That announcement was followed by
reports that Chinese regulators (of which there are quite a few) might see the purchase undermining their goals of promoting fuel efficiency and consolidation in the country's burgeoning auto industry.
The latest Reuters report is based on comments by a Ministry of Commerce spokesman, who said that both his ministry and the National Development and Reform Commission hold a "supportive attitude toward Chinese companies venturing abroad." But as a source notes in the story, this marks the beginning, not the end, of a multiagency process.
Meanwhile, it's clear that green energy is a national priority for China, and that Beijing is happy to use all available levers -- including protectionist measures -- to promote it. According to a report in Monday's New York Times, when the government took bids this spring for 25 large contracts to provide wind turbines, all six multinationals that submitted bids were
denied on technical grounds.
Whether Tengzhong is also tilting at windmills in its quest for gas-guzzling Hummer will no doubt be revealed in due course, after decisions are made on high, for opaque reasons. -
Kenneth Klee
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