Fat Dragon is a partial subscriber to this thesis. There is little doubt that approval for deals involving foreigners buying Chinese assets has slowed dramatically in recent months, in all manner of sectors.
Price is one issue. As a result of the success of the overseas listing of China Construction Bank, many in China have decided that foreigners have been able to buy state assets on the cheap. The second issue is control. Many Chinese enterprises are happy to have the foreigners' money, but managers don't want to lose their jobs in the process. Foreign investors, however, having been burnt before, insist on getting clear cut control before paying up.
Some Hong Kong-based analysts say the debate is much ado about nothing. One of the most Pollyanna-esque screeds came from Jonathan Anderson of UBS. A smart, China-wise economist, Mr Anderson said that the "simple truth" was that there was little more of the state economy to be put at risk. Who is he kidding? The banking, insurance, securities, energy and numerous other sectors all remain virtually 100% state-owned. Where there are foreign stakes, they are minority holdings, or in tightly managed 50-50 joint ventures.
For a reality check, Mr Anderson ought to talk to his UBS colleagues who were forced to wait months for final approval to buy just 20% of Beijing Securities. The obstacles to final approval vary from deal to deal. Everyone from the regulator to the responsible ministry to the local government owners and the managers of the state enterprises themselves get a say.
Often, the much-maligned local governments offer the least opposition. For the most part, they are happy to be rid of decrepit SOEs, with all their debts and pension obligations. The managers, however, are willing to put a spoke in the foreigners' wheel because a sale means they could be out of a cosy job with a raft of attendant privileges.
Expect this debate to go on and on, for a number of reasons. The SOE managers will continue to resist, and probably with some support in Beijing by cleverly tweaking their anti-foreigner message to suit current policy. At the moment, the most fashionable line is that a sale to the foreign devils would run counter to Beijing's state policy of building internationally competitive national champions.
Equally, expect the big multinationals to keep pressing their noses against the window, demanding approval for buyouts. Rather than seeing too many national champions coming out of China to compete with them around the world, they would like to snap them up now.