State-owned entities increase outbound activity

Beijing Automotive Industry Holding Co (BAIC) is said to be planning a bid for Opel, a unit of General Motors. Meanwhile, it has been reported that China National Petroleum Corporation (CNPC) is interested in YPF, an asset of Spanish oil company Repsol.

BAIC is a state-owned enterprise which has established joint ventures with several overseas auto makers, including Jeep and Daimler-Benz. It has just announced a merger with Fujian Motor Industry Group. CNPC is also state owned and is the country's largest oil and gas producer and supplier. It is the parent company of PetroChina which is listed in Hong Kong, New York and Shanghai.

Some have expressed doubts about the suitability of the BAIC deal: the Wall Street Journal quoted the head of Opel works council, Klaus Franz, as saying that BAIC was only interested in technology and had “no experience in global auto production”. A similar lack of experience was cited as one of the reasons behind the alleged reluctance to approve Sichuan Tengzhong's attempt to buy the Hummer brand from General Motors.