China to Detroit: Don't Call Us, We'll Call You

Bertel Schmitt
by Bertel Schmitt
china to detroit don t call us we ll call you

For the time being, China’s central government will say “bu hao” (not good) to any moves of its government-backed automakers to do any overseas mergers and acquisitions, International Business Times reports via Gasgoo. It’s not that the Chinese government is against the idea. They think, global asset prices will continue to drop, and better terms can be reached for offshore acquisitions by waiting. “The State-owned Assets Supervision and Administration Commission hopes the manufacturing companies, will adopt a wait-and-see attitude to purchasing global assets,” said commission chief Li Rongrong in a recent internal meeting. A mole in the commission said “Beijing won’t approve of automakers and banks to purchase overseas assets in the near future unless the buyers can prove the strategic importance of securing the deals.” Meaning what?

As all large Chinese automakers are completely, or to some extent government-backed, the edict from Beijing means that Volvo, Saab, et al. are now out of buyers of last resort. The timing of the announcement is interesting. New US Secretary of State Hillary Clinton had just been in Beijing and profusely thanked the Chinese government for buying US debt. Conspiracy theorists undoubtedly will speculate that hints may have been dropped that asset prices of US automakers will get cheaper after Chapter 11. Which of course is pure fantasy . . . .

Join the conversation
4 of 12 comments
  • Mtypex Mtypex on Feb 24, 2009

    China wants our retirees?

  • Dzwax Dzwax on Feb 24, 2009

    just parts of them

  • SCE to AUX SCE to AUX on Feb 24, 2009

    The Chinese aren't stupid; they just don't want to buy losing companies - it doesn't matter how cheap they are. Just because they have money doesn't mean they want to jump into the Beg 3 cesspool. Besides, they could invest the same amount in domestic Chinese car companies and yield far more success and payback.

  • Flashpoint Flashpoint on Feb 24, 2009