Buy, but don't "buy American"

The Hummer might become as Sichuanese as hot pot if talks between Sichuan Auto and Hummer’s parent company, General Motors go well. Hummer saw sales drop by 60% in January, but Sichuan Auto could still pay up to US$500 million for the automaker. But car brands aren’t the only thing that might be getting new ownership. China Minmetals Corp, has offered US$1.7 billion for Australia’s OZ Minerals, the second bid by a Chinese company for overseas natural resources in as many weeks. No word on how shareholders feel about the deal, but there probably won’t be much opposition. OZ Minerals is attempting to meet a February 27 deadline to pay off a US$90.9 million loan, so any help is most likely welcome. Beijing is also considering setting up a new fund to help domestic oil producers buy overseas assets, but that may help little as the oil companies’ main obstacle in closing the deals is political not financial. The US government’s “Buy American” provision in its economic stimulus package is seen as an obstacle in Beijing. State media have highlighted it in editorials and a spokesman for the Ministry of Commerce expressed “deep concern” over what Beijing sees as protectionist measures.