| BEIJING, March 12
BEIJING, March 12 Amid the scripted discussions
and slogan-heavy speeches that characterise China's annual
parliament, a brief off-the-cuff exchange may have been far more
telling about the overseas ambitions of the giant economy.
Vice-Premier Wang Qishan warned against a rush to invest
abroad and called instead for prudence when Xiang Wenbo,
president of machinery maker Sany (600031.SS), said the
financial crisis gave Chinese firms a perfect chance to hunt for
That "splash of cold water", as Wang's reply has been called
by the Chinese media, was delivered on Monday, but reports of it
are still building up to a crescendo. A leading business
newspaper, the Economic Observer, featured the story on its
website on Thursday (www.eeo.com.cn).
At a session for parliamentary representatives from Hunan,
the central province where Sany is based, Xiang said money was
the obstacle to overseas deals and that the firm hoped for
credit support from the government.
Wang, who is responsible for economic and financial affairs
in the Chinese cabinet, began his reply with flattery.
"You are someone who is worthy to have come from the same
soil as Chairman Mao," Wang said. "Like a Hunanese fighter, you
really do not lack confidence in taking on the financial crisis
and you have the manner of the Chairman when he was waging
But, according to published accounts, Wang changed his tone:
"Are you certain of your managerial skill? Have you analysed
the cultural differences between the two sides? Do you
understand local labour relations?
"If the engineer of your partner resigns, don't tell me that
you would send people over from Changsha (the Hunan capital) and
get the entire company to start speaking Hunanese? If you don't
'know yourself and know your opponent', then your confidence
scares me," he said.
'RESEARCH YOUR TARGET'
Wang concluded with an appeal for due diligence.
"If you want money, I can give it to you," he told Sany's
Xiang. "But you first have to research your acquisition target
very well and then I will give you a reply.
China's potential investment clout on the world stage was
illustrated in February, when the country's firms and
state-owned banks directed more than $50 billion into Russian
and Brazilian oil deals and stakes in Australian mining firms
Rio Tinto (RIO.AX)(RIO.L) and OZ Minerals (OZL.AX).
Outbound mergers and acquisitions (M&A) by Chinese companies
leapt 64 percent last year to $47.8 billion, Thomson Reuters
Most deals, however, have focused on securing access to
natural resources rather than establishing global firms -- and
brands -- that would require more complex management.
Sany is among the growing ranks of Chinese machinery makers
building up a presence overseas in hopes of eventually competing
with global leaders such as Caterpillar Inc (CAT.N).
It has unveiled plans to build a $100 million U.S. plant
near Atlanta to assemble concrete mixers, which would make it
the first Chinese machinery maker to set up shop in the North
Chinese regulators have also approved its plans to build a
100 million euro ($128 million) research and manufacturing
facility in Germany.
The National People's Congress, China's largely ceremonial
parliament, concludes on Friday after meeting for nine days.
(Reporting by Simon Rabinovitch; Editing by Erica Billingham)