China defends M&A policy towards foreign investors

By Kirby Chien

BEIJING (Reuters) - China said on Saturday its policy toward foreign acquisitions of domestic firms was fair, explaining that broader national concerns take precedence over the potential benefits to any single company.

The comments come as protectionist tendencies around the world are rising with Beijing at the center of anti-dumping accusations from firms in the West that view Chinese competition as unfair.

"We want to actively encourage mergers and acquisitions," Jiang Yaoping, a deputy economic minister, told a conference.

"But not to maximize the benefits of one particular company," he said. "The concerns of the wider public and the country are more important."

Regulators rejected in March a $2.4 billion bid by Coca-Cola (KO.N: Quote, Profile, Research) for China's top juice maker, Huiyuan Juice (1886.HK: Quote, Profile, Research), blocking what would have been the largest-ever takeover of a Chinese company by a foreign rival.

The ruling by Jiang's ministry that the merger would have been bad for competition fanned fears that Beijing would not focus on narrow market-concentration grounds but rather on the basis of China's national economic development.

Coca-Cola is not alone in wanting to increase its investment in China, the world's third largest economy and still one of its fastest growing.

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