In less than a week, two big Chinese State-owned companies, both eyeing foreign expansion, saw completely different outcomes of their "going west" moves.
On June 11, shareholders in OZ Minerals overwhelmingly approved a $1.386 billion offer from China Minmetals Non-ferrous Metals Co to buy most of the indebted miner's assets.
The news could hardly alleviate the bitterness felt in China the previous Friday when Rio Tinto dumped Chinalco's planned $19.5 billion offer for an improved stake in the mining giant and turned to a joint venture proposal with former rival BHP Billiton. The deal could have been China's largest foreign investment so far.
In the latest response, an official with the Ministry of Industry and Information Technology (MIIT) said Tuesday that the proposed alliance of Rio Tinto and BHP Billiton had a "strong monopolistic color" and Chinese firms would watch it closely and find ways to cope with it.
Last year, China imported 440 million tons of iron ore, half of the world's total, so any slight market changes would affect Chinese steel makers. China's anti-monopoly law should apply in the proposed deal, said Chen Yanhai, head of the raw material department of MIIT at an industry meeting held in the northeastern city of Anshan, Liaoning province.
If the tie-up proved to be monopolistic, "we have to seek new policies and regulations to allow Chinese companies have a bigger say in iron ore pricing," said Chen without elaborating.
On Monday, spokesman of the Ministry of Commerce Yao Jian said if the revenue of the joint venture reached "a certain amount," China's anti-monopoly law would apply.
That law requires a company to get government approval before consolidation if its global revenue exceeds 10 billion yuan (1.47 billion) and its revenue in China exceeds 2 billion yuan.
Anger from China
The failed Chinalco deal has been frequently linked with a similar scenario in 2005, when political obstacles blocked China National Offshore Oil Company (CNOOC)'s $18.5 billion attempt to acquire Unocal, a US energy company.
"The Chinalco debacle followed the same pattern as the aborted CNOOC-Unocal deal four years ago," Yao Shujie, professor of economics and head of the School of Contemporary Chinese Studies at the University of Nottingham, told Xinhua by e-mail.
"It not only marked the collapse of a strategic partnership between two independent trans-national corporations, it also reflected the competition and compatibility between Western powers and a rapidly growing China in politics, culture and economy," he said.
The Chinalco debacle has aroused anger and disappointment from many Chinese. Many believed that the failed deal showed prejudice against China's big state-owned enterprises.
Draw more lessons
But Yao said a notable factor in the case is the international inexperience of China's business leaders.
"The speed of global expansion has given Chinese companies little practice of the pitiless reality of Western-style acquisitions," he said.
Xiong Weiping, Chinalco's chairman, has said that Chinalco had worked hard to respond constructively and engage with Rio Tinto to appropriately amend the transaction terms announced four months ago, but the result was completely out of the company's control.