Daily commentary about China by TIME correspondents.

Coke and Huiyuan: The Real Rules for Foreigners Buying Chinese Companies

So the Finanace Ministry rejected Coca Cola's $2.5 billion bid for China's biggest juice maker, Huiyuan. The pruchase would have broken the new anti-monopoly law, apparently. There's plenty of good balanced analysis out there from the likes of Bloomberg and others about why this happened. But over at the China Law Blog, we get a refreshingly blunt  (and rather smugly self-congratulatory but I guess they have reason to be so) cut-to-the-chase look at the real (if unspoken) rules for foreign investors trying to buy mainland companies: 

Foreigners are permitted to purchase small Chinese companies that the central government is not interested in managing.Foreigners are permitted to purchase large, state-owned enterprises that suffer from financial difficulty, provided the foreign investor agrees to restructure the purchased company.

Foreigners are permitted to purchase non-majority interests in strong, successful Chinese companies, but only if there is some added benefit, such as transfer of technology, advanced management or access to foreign markets.

Foreigners are not permitted to purchase a majority interest in a large and financially successful Chinese company. Even smaller companies are off the table if they are financially sound and work in a core technology field or have created a strong or historically important brand.

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  • 1

    Sounds like the US should impose all these rules about Chinese and Chinese government acquisition of US companies too.

  • 2

    to johnsmith, the US have already set the tone by denying Chinese companies in the past from buying American companies, such as the Unocal purchase, and putting road blocks when Chinese appliance companies wanted to buy Maytag, for example. Not only that, Lenovo's purchase of IBM's computer division almost fell through because of US political interference. Given the hostility of the US when it came to Chinese companies buying US companies, the Huiyan case is long overdue. China is just playing tit for tat for something the US started.

  • 3

    [...] Enough with the death knell pronouncements. Foreign private equity investments in China is not going to die, but it will need to modify. Wise foreign private equity firms are going to need to focus on the types of deals that have a real potential to work in China. China will accept the following sorts of foreign deals: [...]

  • 4

    After the bristletails eat up all the properties of the "state-run" campany , they are "permitted to purchase". Provided that these companies still remain a small piece of flesh to be carved up, the CCP will never give up their grip. A majority of the "state-owned enterprises" have been devoured to fall down.

  • 5

    Geez. Please build a WEBSITE, conscienceinchina! This is JUST A COMMENTER THREAD!!!

  • 6

    conscienceinchina,you are so ridiculous!SHAME ON YOU!

  • 7

    @conscienceinchina
    Your brother-in-arm Gao Zhisheng is still far from qualified as survivor. He could make him a perfect hero only after being water-boarded in Guantanamo.

    @Johnsmith,
    --"US should impose all these rules about Chinese and Chinese government acquisition of US companies"?
    You are not well informed that USA has had all the rules already. And it was USA that threw the first punch and even a second punch.

  • 8

    The "five-jiaos" came in time! but now I have to leave for my bed, wait for my storm please, Commies!

  • 9

    to the "justrecently":

    If you were such a "justicial" person, you should blame the tyranny and the butchers hurriedly, instead of me!

  • 10

    To the "loveuchina":

    You should be named "love u CCP", exactly.

    It's nothing, that I just "shame" you and your master CCP. But you shame the whole Chinese and human beings!!!

  • 11

    To the "laohong":

    You are right. I am worrying about my "brother" Gao, the bravest one among the warriors fighting the dictator, with the world. And the all on which Gao has been tortured and excruciated must backfire on you and your master when the CCP fall down!!

  • 13

    conscienceinchina: The tyranny and the butchers are responsible for a lot of things. But when you flood comment threads with complete articles, that is your decision. A link to an article should be enough. As far as I can tell, commenting is for ones thoughts on an article, not for an article itself.
    That said, it is of course up to you how you want to communicate with other commenters and authors.

  • 14

    @conscienceinchina

    --"when the CCP fall down!!"?
    In your still long life time you will obviously see that day, as spoonfed by CNN and your high school teacher yesterday.

  • 15

    外国人可以购买那些中国政府没有兴趣管理的小公司.如果愿意投资重组,外国人可以购买遭受财政危机的中国大型国有企业.
    只要他们可以带来好处,比如提供技术,先进的管理,或有利于出口,外国人可以购买微利的大型中国企业.
    外国人不能购买获利丰厚的大型中国企业.甚至对于小公司,只要它在财政上取得成功且位于核心技术领域,著名的或曾经著名的,都不能被外国人收购.

  • 16

    To the "laohong":

    You are always right, good boy! I really want to have a "long life time" so as to witness how you and your master will be garroted. So, wish you a "long life time" too.

  • 17

    To "justrecently":

    It's not too bad that so far you admonished me just on my "commenting method", not on the miserable and brutal stories I posted as well as my views.

    Considering I never get in the way of your rights to comment here, I suggest that whether the form of my comments is appropriate must be decided by the moderators here on "the China Blog".

  • 18

    Considering I never get in the way of your rights to comment here, I suggest that whether the form of my comments is appropriate must be decided by the moderators here on "the China Blog".
    Indeed. I admire their patience. This thread here, btw, is about Coca Cola and Huiyuan. And my comment on Friday wasn't an admonishment, but a spontaneous request in capital letters.
    Take it easy.

  • 19

    conscienceinchina son,
    High time for you low IQ to have your own counter-rally in DC to garantee your beloved mate Gao Zhisheng a last chance of water boarding to become a perfect hero.
    http://www.google.com/hostednews/ap/article/ALeqM5gbpZpzf22HQklONb49NWXybzhSAgD972MMNO0

  • 20

    Simon,
    The "China Law Blog" link leads us to nowhere ... please check...

  • 21

    I visited the World of Coca Cola in Atlanta last year and was amazed by the ambition and achievement of this global empire.

  • 22

    To "justrecently":

    I admire their patience too, indeed. They (CNN moderators) can even endure an enormous amount of nonsenses and lies created by the "five-jiaos(Wumaos)", what else they can not suffer?

    But quaere, who prescribes here that the comment must accurately follow the text? Indeed, your own comments correcting me are not matching the theme too. And if you have time off, you may refer to the all dated comments here to make sure whether each of them is according your "request".

    ---justrecently Says:

    Indeed. I admire their patience. This thread here, btw, is about Coca Cola and Huiyuan. And my comment on Friday wasn't an admonishment, but a spontaneous request in capital letters.
    Take it easy.

  • 23

    To the Wumao "laohong":

    So far you are the most brazen and shameless five-jiao here who scorn to conceal his real identity. You did a good job breaking one rule of the five-jiao's work manual "covering up your real status". Your abnormality has harmed the repute of all five-jiaos who are usually "patriots".

    It's inspiring that the warriors are still insisting on their ideal despite the excruciations, torture and massacres. Democracy will never be stopped by the tyranny and you animals.

    ---laohong Says:
    @conscienceinchina
    Your brother-in-arm Gao Zhisheng is still far from qualified as survivor. He could make him a perfect hero only after being water-boarded in Guantanamo.

    ---laohong Says:
    conscienceinchina son,
    High time for you low IQ to have your own counter-rally in DC to garantee your beloved mate Gao Zhisheng a last chance of water boarding to become a perfect hero.

    ---Note: Gao zhisheng(高智晟), Chinese most famous and honorable human rights lawyer, who has been and is being brutally detained, tortured, excruciated, sentenced by the CCP regime for a long time. His current whereabout is unknown.

    "Waterboarding", a form of torture. It consists of immobilizing the victim on his or her back with the head inclined downwards, and then pouring water over the face and into the breathing passages. By forced suffocation and inhalation of water the subject experiences drowning and is caused to believe they are about to die.(From Wikipedia)

  • 24

    Well. I do not see anything unbecoming in what China is doing. It is precisely the salient form of protectionism that the new paradigm of the West is now promoting.

    By the way, did the US not reject earlier the Chinese attempt to buy over one of its iconic firms?

    So, why all the hoo-hah?
    (Tan Boon Tee)

  • 25

    Well - my recommendations come free of charge, conscience. But life's to short to have long discussions with people like you who are actually mere clones of the CCP - quote:
    conscienceinchina Says:
    Saturday, March 21, 2009 at 1:24 pm
    To the "laohong":
    You are always right, good boy! I really want to have a "long life time" so as to witness how you and your master will be garroted. So, wish you a "long life time" too.
    unquote.
    For the sake of not messing the thread up further, I'm leaving it here. I guess you are getting too much attention anyway.

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