The top economic planning agency in China is likely to reject Sichuan Tengzhong’s bid to buy Hummer from bankrupt General Motors, state radio said on Thursday.
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The National Development and Reform Commission (NDRC), is worried that Sichuan Tengzhong Heavy Industrial Machinery, which makes special-use vehicles and highway components, does not have the experience and resources to run the Hummer business, the radio said, according to Reuters.
Hummer, as an expensive, gas-guzzling sports utility vehicle, would not fit in with the Chinese government’s policy of encouraging energy-efficient vehicles, the radio said.
Reuters noted that China has a complicated, fragmented system to regulate overseas investments involving many government bodies, including the NDRC, the ministry of commerce and the state administration of foreign exchange.
To further regulate overseas acquisitions by Chinese firms, the NDRC last Friday issued an order requiring Chinese companies to report intended overseas acquisitions to the central government in Beijing before signing legally binding contracts.
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By GlobalDataBut the Ministry of Commerce recently sounded a more positive note about the proposed deal, saying the bid was normal behaviour for a company seeking to take advantage of the global downturn, the news agency added.
