A long-running Chinese (business) soap opera has finally come to en end, as AP reports:
“U.S. private equity firm Carlyle Group has dropped its bid to buy a stake in a Chinese construction equipment maker…after multiyear talks that stirred nationalist opposition.
Carlyle’s bid for Xugong Group was closely watched amid U.S. government warnings about possible Chinese protectionist sentiment. Beijing stepped up scrutiny of foreign acquisitions following the Carlyle bid and enacted a rule last year requiring a national security review of such deals.
…the bid sparked complaints about asset sales to foreigners. China is the world’s leading destination for foreign investment but the takeover of existing companies is still unusual.
…Carlyle reduced the stake it wanted to 50 percent in 2006 and last year cut it further to 45 percent.”
China Daily’s take is a bit different, with Xugong as the dumper:
“Xugong Group Construction Machinery Co, China’s biggest maker of construction equipment, has abandoned a plan to sell a stake to US investment firm Carlyle Group, both companies said in a joint statement…
The two companies’ investment agreement signed in October 2005 for a stake in Xugong has now expired.”
But is is then suddenly quite frank about the reasons for the dumping:
“…the deal was turned down by the Ministry of Commerce amid concern that foreign control of key Chinese firms could threaten the country’s economic security.
This tells us something about business, government ,and media in China. It may not be a case of FDI R.I.P. But it is a good reminder of where sensitivities lie , and that even guanxi of the sort Carlyle can muster will not overcome national interests.
See news sources:
Carlyle’s bid for China company ends 
The Associated Press –
China is the world’s leading destination for foreign investment but the takeover of existing companies is still unusual. The outcry prompted Washington to …
China’s Xugong drops equity sale to Carlyle
China Daily – China 
Xugong Group Construction Machinery Co, China’s biggest maker of construction equipment, has abandoned a plan to sell a stake to US investment firm Carlyle …