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Under pressure from nationlists, China's government is expected to continue blocking approval of foreign investments in key sectors. In particular, any involving "national strategic industries," a definition which now specifically includes the bearing industry. And while rejecting more foreign investors outright, it is also consolidating many sectors under state control.
The China Industrial Security Center, part of the State Economic and Trade Commission, said its studies now show foreign merger and acquisition activity in China has reached the point where it has led to essential monopolies in some industries, threatening domestically owned and controlled businesses.
In addition, foreign investment is seen as potentially weakening China's control over its own destiny in developing infrastructure and supplying defense-related needs.
CISC holds that foreign investments have not produced the often-promised results -- access to new technology, international synergies, productivity gains -- or delivered operating advantages, or any special improvement in the business at all.
Instead, CISC says allowing foreign direct investment has many risks :
• Market manipulation. It now claims foreign investors use the Chinese companies as tools to control specific domestic Chinese markets, earn outsized profits, then ship those profits out of China and overseas to the parent company.
• Impact on local economies. CISC said China's economic safety is at risk in allowing foreign financing and ownership of raw materials supplied to domestic energy, transportation, and similar infrastructure dependencies. Similarly, autonomy is at risk when foreigners own key support businesses in the finance and publication sectors.
• Hindering local industry. When they come to relying on foreign funding, input and control, the Chinese businesses become too passive in developing their own skills, products and technologies. This threatens the future of business and may ultimately threaten China's defense security.
The bearing manufacturing industry was specifically cited as an example of one where foreign involvement should be limited. In the bearing industry, foreign ownership should spark concern -- because reliance on foreign resources hinders organic domestic development of skills and resources, and also because it creates the potential for China to rely on foreign-owned bearing manufacturers for the availability of key components needed for domestic security.
• Foreign ownership of large businesses in China, with no government controls, is a threat to the traditional economic system, which relies on many small-scale manufacturers. CISC said foreign-owned multinationals have unfair advantages over local businesses which can be short of technology savvy, and/or do not have much export sales built up.
In China, small and medium enterprises (SMEs) account for as much as 70% of domestic manufacturing output. Their access to capital has been hurt by recent government reforms aimed at tightening inflation and throttling back overheated growth.
Recent statistics issued by the State indicate manufacturing businesses are involved in nearly a quarter of all foreign-funded M&A activity in China. Overall, there were 169 M&A deals in China during second quarter 2008 -- up 225% from first quarter.
Despite the central government's stance on majority foreign ownership, locally-solicited foreign investment has been accelerating in manufacturing-heavy provinces. For example, FDI in Sichuan Province this year is up 108% to USD $1.8 billion, despite May's devastating earthquake. Over 180 new foreign-funded businesses were given approval to begin operations in Sichuan, down 13 percent from 2007. But those businesses have agreed to invest more than $4.2 billion, up 208% from 2007.
ArcelorMittal was recently rebuffed in its efforts to become more deeply involved in the highly fragmented Chinese steel industry. The Chinese government is consolidating steel producers; it wants the 10 largest, currently at 35% market share, to be at 50% by 2010, and 70% by 2020. Lakshmi Mittal said; "I do not see that in a year or so, the Chinese government will change their strategy where they do not want foreign companies to have a majority control."
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| HCB7003E.2RSD.T.P4S bearing | 17 | 35 | 10 |
| HCB7003C.2RSD.T.P4S bearing | 17 | 35 | 10 |