Chinese machinery maker Tengzhong's bid to acquire the Hummer brand from General Motors Co should be viewed as a trade in technology and not an overseas investment, a top Chinese planning official said on Thursday.
According to the full documents they submitted, the Tengzhong deal does not belong to overseas investment, but rather should be seen as a trade in technology and services, because they want to buy the brand, the technology and the patents, Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission, told Reuters.
Zhang added that this meant the Ministry of Commerce, not the NDRC, would have ultimate authority over the deal.
He was speaking on the sidelines of a meeting of the World Economic Forum in the northeast Chinese city of Dalian.
Sichuan Tengzhong Heavy Industrial Machinery, a little-known Chinese firm, raised eyebrows when it unveiled plans three months ago to take over the Hummer brand.
The company's lack of experience in the car industry has stirred doubts, while state media said the Chinese government would likely harbor objections to taking over a gas-guzzling SUV brand.
Opposition has quieted down in recent weeks after China's commerce ministry sounded a more positive note on the deal, saying Tengzhong's move was normal for a company seeking to take advantage of the global downturn.
China's Commerce Ministry has not rejected Tengzhong's planned purchase of Hummer but has asked for more information on the deal, a source familiar with the matter said on Tuesday.
GM and Tengzhong have said they will not disclose the financial terms of the deal.
(Reporting by Aileen Wang, Zhang Shengnan and Simon Rabinovitch; Editing by Ken Wills)