GE Capital and Citic, the mainland's major investment arm, each controls 34 per cent of AsiaSat. They have proposed to take the company private for US$295 million. If succeeded, this would have resulted in a 50-50 shareholding between the US and mainland partners.

The plan required the US government approval because the company possesses dual-use US technology. Shareholders were informed of the disapproval two hours before putting the plan to vote.

No explanation has been given so far. One argument is that it will be more difficult for the US authorities to monitor AsiaSat's operation once it goes private, which means far less disclosure.

Yet it is difficult to accept that the US authorities, who have the ultimate say on the export of satellite-related technology, have to rely on the disclosure requirement of a listed company to get needed information from AsiaSat.

To the central government, this is another example of the US blocking mainland-related deals for political reasons.

This is the latest thing Beijing needed as the country struggles with growing nationalistic concern in setting its foreign investment policy.

Ever since Congress shot down CNOOC's acquisition of Unocal Corp in 2005, mainland nationalistic sentiment has been growing. Huge profits made by foreign financial institutions in the mainland, in particular the capital gains from the pre-listing stake sales in state banks, added fuel to that.

The increasing weight of 'nationalistic' argument among officials is well demonstrated by the public rancour between the founder of China's top beverage group Wahaha, Zong Qinghou, and its French partner, Danone.

Early this month, Mr Zong launched a public attack against Danone for attempting a hostile takeover of an operation that he set up on his own, bottling and selling drinks under the Wahaha brand. Danone hit back that Mr Zong had breached exclusivity contracts by making the same product outside the scope of the joint venture.

Mr Zong, a National People's Congress member, called on the government to interfere, warning that a large chunk of China's beverage industry would fall into French hands if Danone has its way. He even brought in Wahaha's employees and distributors who accused Danone of 'corroding' the Chinese brand.

Eventually, the Ministry of Commerce asked both sides to stop their megaphone negotiations. Its spokesman maintained that the ministry would adhere to regulations so as to not only encourage foreign investment but also to protect the rights of mainland business.

On the surface, Beijing is playing it cool. Yet, don't forget that Mr Zong is a guy who has built the national leading water brand from scratch. He knows the game well.

In pulling out the 'national interest' card to defend his case, which doesn't look very good in legal terms, Mr Zong would surely have assessed where the wind was blowing. At least, he sees a chance to win there.

There is a government reshuffle happening in November. No government official will risk being called a 'traitor' in the coming months.

Besides, there is the bickering among ministries. The focus is who would have the final say in the approval of domestic enterprises by foreign investors. The National Development and Reform Commission is understood to be fighting hard to get its hands into the process. Protection of national interest is its main argument.

At the same time, officials know too well the importance of foreign investment to the country's well-being. The struggle between the two forces probably explains why not much detail has been approved since the announcement of the 'Provisions on the Takeover of Domestic Enterprises by Foreign Investors' in September.

The AsiaSat episode, if anything, will only add weight to the argument that if the US is putting up hurdles to guard its prime asset - technology, then the mainland should guard its own - market.