July 4, 2007 (LPAC)--The Chinese Securities Regulatory Commission (CSRC) has rejected an attempt by private equity operation Carlyle Group to buy an 8% share of the Chongqing Commercial Bank, based in western China.

The China Knowledge website reports that the CSRC could have been concerned about Carlyle's lack of banking experience. The bank reported that the bid was rejected because it "does not meet current relevant rules and regulations."

In 2005, Carlyle had tried to buy an 85% controlling stake in Xugong Group, China's biggest construction machinery manufacturer. This was rejected by the Ministry of Commerce in March 2006, because of concern about Chinese national economic security. The Carlyle bid became a national issue, and opponents launched an Internet blog against the takeover. Eventually Carlyle was only able to get 45% of the firm.

China's National Peoples Congress is now considering an anti-monopoly law, which would require a national security review before foreign companies could take over Chinese enterprises.