December 2001, China officially became a WTO member. When the market fully open the door, only to liability ratio of more than half of China's state-owned enterprises and private enterprises to compete is still raging in Neonatal and to the world top 500.
State-owned enterprises in trouble from the latter half of the 1990s began. First, because the influx of foreign capital,cast bronze occupied the Chinese market, the market share of domestic enterprises compression. In addition, foreign-funded enterprises enjoy tax inequality makes 'two exemptions and three reductions', tax is only half the state-owned enterprises. bronze bushing There is then the local government is very keen on attracting investment, particularly foreign investment.
November 2002, the then State Economic and Trade Commission, Ministry of Finance, SAFE and the State Administration for Industry jointly issued the Decree No. 42 "Use of Foreign Investment to Reorganize State-owned Enterprises Interim Provisions",dry bushing making the introduction of foreign capital addition to "the introduction of capital and technology, promote economic development "role, was also given the" optimize the structure, promoting reform of state-owned property, "the meaning. Since then, the list is no longer limited to multinational mergers and acquisitions,plain bearing "resistance" weak private enterprises, a more direct forefront of the industry's top state-owned enterprises.
Since the file more than 4 years from the commencement time, sleeve bushing the vanguard of China's equipment manufacturing industry have been listed on the local government of transnational corporations "menu" inside.DU bushing 2005 to 2006, the board header number of "foreign decapitation" is to lead a multinational media mergers and acquisitions of competing companies in the vanguard of the equipment manufacturing industry one after another on the case.
The bearing industry, for example. Association statistics show that China's axis to the end of 2005,bushing multinational companies in China has established 24 joint ventures, wholly-owned manufacturing enterprises bearing products,brass bushing with a total investment of about 4 million U.S. dollars. And that time the three major bearing manufacturer in China Luoyang Bearing Factory, Harbin Bearing Factory and the face of Bearing Factory in financial difficulties, Mould guide plate their equity ownership has become the latest "decapitation" topic. Three production and sales revenue was accounted for 15% of the domestic bearing industry for more than the domestic bearing and master cutting-edge technology, national defense,plasic bushing aerospace, railway vehicles, major industries such as machinery and equipment by the three bearings is almost available.
National Development and Reform Commission, Institute of Economic System and Management Research Center, sorghum, state-owned assets in March 2006 visit to Luoyang Bearing Factory. He received a local city leaders are excited that bearing plant up for sale. "He told me, because restructuring, they sell the factory to the world's four major bearing companies (from Germany, the United States, Sweden and Japan) tender." Sorghum hear can not help but ask: "to bear a large number of factory military mission, if sold to foreigners, how will undertake the task of national defense? "
"They gave me the answer is' separation of the plant, involving the military part of the closed '." Having said that sorghum can not help but shook his head, "my problem immediately and follow up,' how R & D team apart? I'm sure, be others bought, the military must be to take away some of the '. "this issue, no one answered.
Sorghum research in the end two months later, in May 2006, the German Schaeffler Group signed a framework agreement Luoyang SASAC: Schaeffler to 1.1 billion yuan acquisition of Los axis addition to military and other plants all but three assets, including brands, real estate, equipment, land assets and some debt, and promised 10 billion investment within 5 years and then building and equipping a new plant, employing 6000-7000 people.
"Bearing Association strongly opposed to the three bearing plants to attract foreign investment, and a letter to the Central, said such a restructuring can not be, related to national security issues, we can not just business effectiveness." Sorghum told reporters, "Shenzhou VI" bearing on the core axis from Los .
The end, the merger was successful "intercept", but can only be too late. Prior to this, Schaeffler in 2001 designated the Ministry of Railways and the original plant - Ningxia Northwest FAG Railway Bearing Plant Joint Venture, the former absolute control. However, after the German side control the right to operate the huge loss of business year after year, China will sell all shares held, making it a wholly owned German. "We always talk about the 'market for technology', but in fact is that FAG Schaeffler took everything, and really get the market or the Schaeffler." Sorghum said.
State Council Development Research Center in July 2006 published a research report that: the industry in China has opened in the top five in each industry almost by foreign-controlled enterprises; 28 major industries, foreign investment in 21 an industry with majority control of the asset; 18 state-level fixed appliance companies, 11 joint ventures with foreign investors; cosmetics industry has been 150 foreign control; 20% of the pharmaceutical companies in foreign hands.
Sorghum in the article "Foreign mergers and acquisitions in China and national economic security situation" in the cries of "my generation Wei Yi" and Merger threat to the security of the industry summarized the "three sins": the loss of state assets, the National outflow of wealth; foreign-led, or monopolize the market, depressing domestic enterprises; suppression capability of independent innovation and the growth of national brands.
September 8, 2006, in order to ease the "decapitation" movement, the state promulgated the "Regulations on Foreign Investors to Merge Domestic Enterprises." However, the provisions of the impulse for local businesses to sell can only be considered only boiling soup Yang. December 2006, which provides that the first four months of the implementation of the Ministry of Commerce approved to Luohe SASAC and investment Haiyu Luohe Shineway Group held 100% equity holding transferred to Hong Kong by Goldman Sachs Rotary Vortex Limited; February 2007, the Beijing treasure listed in the China Beijing Equity Exchange to sell all shares (Beijing Sanlu Factory state-owned shares 83.42%, 16.58% employee shareholding), one month after Johnson signed with the U.S. transfer of entire equity interest in the contract.
Sorghum that: "After 2006, China's backbone by foreign capital, with a strategic business taken a cautious attitude, but foreign investors began to engage in diversionary tactics, that is, before accounting for the corners, light attack."
Foreign M & A peak in 2006-2007, after a number of industries for the Chinese people facing "his home world" has become wary of the danger of gradual and sensitive, especially Carlyle's acquisition of Xugong caused a stir (see " Business Week, "September 20, 2006 No. 18 cover story," "Xugong case" details the devil "). When the construction machinery in China since the vanguard of foreign acquisitions in 2008 because public opinion strongly opposed to die a natural death after this wave gradually subsided. Overkill, some do not involve the safety of normal commercial transactions industry has also been given under the banner of nationalism, such as the famous "Dawa dispute" and the Coca-Cola Huiyuan case.