my question: ie, nickel and dime operations that are not profitable and have little chance of pan-Asian or international success?

-- Foreigners are permitted to purchase large, state-owned enterprises that suffer from financial difficulty, provided the foreign investor agrees to restructure the purchased company.

my question: Foreign PE as bailout/stimulus packages? And how much restructuring is allowed? If a very good job is done, is the PE firm pushed out for management by provincial/central gov't agencies?

-- Foreigners are permitted to purchase non-majority interests in strong, successful Chinese companies, but only if there is some added benefit, such as transfer of technology, advanced management or access to foreign markets.

my question: So no investing simply for profit? And PE firms cannot guarantee market access in their home countries, especially where consumer safety applies (Chinese cars) or the Chinese firm cannot meet regulatory/capital investment requirements. PE firms might/would face NDA lawsuits for transferring the technology/practices of home country firms they invest in just to get into Chinese firms.

I was just at the Sustainability Summit in Denver and there was a Cleantech presentation regarding PE investment in China. It's not that PE/VC doesn't want to invest, but they fear to tread in unfamiliar territory and there are more horror stories accumulating from failed ventures. And the investment firms genuinely fear losing their cleantech IP in China and India.

The refusal of the deal is not unreasonable. As consumers here increasingly move into supermarket shopping, the threat from monopolies is enormous. It is often shocking how few food manufacturers goods are carried in supermarkets in China. Compared to Western countries where a diversity of brands appear across product categories in store, Chinese supermarkets carry products from too few mega suppliers. This is most obvious in the food and beverages area.

I wouldn't get too paranoid about this.