Fair or not, both the collapse of Chinalco's Rio deal and the planned sale of GM's Hummer brand to a little-known Chinese company shows that China still does not enjoy much buyer power in the global market.
Yet this is not necessarily bad. In fact, it can serve as motivation for the country to look deeper within for the engine to drive its economy. China can better tap its inner dynamism to become a global consumer market than simply remain a buyer of little choice.
For Chinese policymakers who are encouraging domestic enter-prises to expand overseas, the recent cases surely look disappointing. With more than $1.9 trillion in foreign exchange reserves, the country is eager to spend some of this wealth on purchasing what is needed to sustain its economic growth.
Due to a combination of political and commercial factors, Chinalco's attempt to invest $19.5 billion in the Anglo-Australian mining company failed last week, with its general manager saying he was "very disappointed". Had the bid succeeded, it would have been the largest overseas acquisition deal by a Chinese company, second only to the China National Offshore Oil Corp's bid for California-based Unocal in 2005, which, too, was blocked.
Clearly, the collapse of the deal marks a setback both to the company and the country. The Chinese company's strategic aim to build itself into an international multi-metal mining company has taken a hit.
More important, its failure to clinch the buyout is a blow to China's effort to secure supply of resources and raw materials for its ever-growing manufacturing capacity.
Meanwhile, the enthusiasm of GM to sell the Hummer brand to a Chinese truck maker just one day after its filing for bankruptcy has given rise to a domestic debate on the viability of the deal. While China has made clear its determination to pursue energy-saving, environment-friendly and sustainable growth, the purchase of a US auto brand famous for being a gas-guzzler obviously does not make sense. It was reported that the US government was ready to approve the deal while the Chinese government frowned upon it.
The difficulty for Chinese companies to buy what they want for strategic reasons is in sharp contrast with the desire of foreigners to sell what may not be good for the Chinese economy.
In a bid to help rebalance the world economy, China feels obligated to spend some of its foreign exchange reserves. But the point is that there doesn't seem to be so many opportunities for China to buy.
Under the circumstances, a change of thinking appears to be necessary for Chinese policymakers. Instead of focusing on overseas acquisition, the country should further step up efforts for expanding the domestic market.
The country will naturally gain much more buyer power when it becomes one of the most important global consumer markets.