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Updated Saturday, June 6, 2009 9:32 am TWN, By John J. Metzler, Special to The China Post

Beijing, from Tiananmen to global business takeovers

BENNINGTON, VT -- China's meteoric economic growth has morphed the macabre but now blurred images of the communist crackdown in Tiananmen Square twenty years ago. Indeed China has mesmerized much of the world with its export driven success as much as with its growing private sector alongside the still rigid political structures of the People's Republic.

For much of China's population, memories of the Tiananmen massacre of pro-democracy students in June 1989 have now been bought off by Beijing's booming business bottom line.

Now in the midst of General Motor's economic meltdown, bankruptcy, and its practical nationalization by the United States government, an apparently private Chinese firm, sensing an opportunity, is set to acquire Hummer, an iconic jewel of what was once part of America's largest company.

General Motors (GM) has tragically become Government Motors, and is set to shed or sell-off less profitable units among them Pontiac and Hummer. A Chinese company Sichuan Tengzhong Heavy Industrial Machinery has bid an undisclosed sum to purchase the ailing unit, but will keep 3,000 American jobs at the Louisiana factory.

Tengzhong which already makes heavy equipment and construction vehicles, would not just be buying an off the shelf and top-notch brand, dealerships, but more importantly the technology.

Acquisition of Hummer, if it goes through, happily does not include the totally separate production facility for its military cousin, the Humvee—obviously larger, heavier, and more technologically versatile vehicles.

Hummer remains a status symbol, less today in the USA than overseas, where Hummers, Jeeps and many American SUVs are wildly popular with the minority who can afford them.

As with another Chinese company's purchase of the British marquee MG sports car company, it appears that firms are seeking well-known boutique brands at lowball prices.

But Hummer's proposed acquisition by Tengzhong Heavy Industrial Machinery presents the PRC with a double edged-sword; buying the firm is one thing. Making it profitable with the same factories and workers and American wages is quite another.

Tengzhong says the production and jobs will stay stateside — at least for now.

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June 7, 2009 abc@

"China has prospered not because of her government, but because the government had enough sense to finally step aside, and allow the hard working and entrepreneurial spirit of the Chinese people to blossom forth in private business."

It would help if this writer knew more about China. The gov't has only half-stepped back ... but also formed a tight partnership with most industries and businesses, not to mention all of the infrastructure the gov't has built, or the monetary policies which have been successful.


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