The Fortescue Metal Group's deal with China expired after missing a self-imposed September 30 deadline to obtain up to $6 billion in debt financing from Chinese financial institutions, said Andrew Forrest, CEO of FMG, the third largest mining company in Australia.

Under the agreement inked on August 17, in return for the financing, FMG agreed to supply cheaper iron ores than the deal between Australian iron ore producer Rio Tinto and Japanese mills. This was widely seen as a milestone for China in the drawn-out battle for cheaper resources and a hard-won achievement as the country tries to break the hold that the three major suppliers—BHP, Rio Tinto and Vale—have on the world's sea borne iron ore market. China is currently the world's largest iron ore consumer and steel maker.

Chris Catlow, an investment manager at FMG told the 21st Century Business Herald that the Export-Import Bank of China agreed to provide a credit line of $6 billion in exchange for a stake in the Australian miner. But FMG declined the offer, fearing a loss of control over corporate management.

Forrest's remark aroused criticism that FMG was ditching its Chinese partner to profit from skyrocketing spot market prices. On December 2, Forrest issued another statement saying that FMG will adhere to the favorable prices until the end of this year.

"China should not pin hopes for greater pricing power on a foreign supplier," said Zhou Yixing, an analyst with the Beijing Shihua International Financial Information Co. Ltd. "After all, it is only rational that FMG tries to maximize its benefits from market changes."

The priority for China is to streamline its domestic steel industry and form a united negotiating front, said Zhou.

Moving Back to Mobile

Lenovo Group Ltd., the largest PC maker in China, plans to buy back its mobile phone unit, Lenovo Mobile Communication Technology Ltd., from a group of investors led by the private equity arm of Legend Holdings Ltd. for $200 million in cash and shares.

Lenovo Mobile was created in 2002 and is now a top Chinese handset brand in the domestic market. Lenovo sold the mobile phone unit last year for $100 million to focus on its PC business.

The reacquisition comes as the integration of mobile and PC technologies creates growing opportunities. "We see great potential for mobile Internet business. Convergence of PCs and smart phones is becoming a global trend," said Yang Yuanqing, CEO of Lenovo.

Indeed, lines are blurring between mobile phones and PCs. While cell phone titan Nokia released the low-cost Netbook PC, PC-maker Dell is making a push into the handset market.

"Lenovo is in a sound position to explore the mobile Internet market thanks to powerful marketing networks and brand recognition," added Yang.

Appliance Expansion

The German appliance giant Bosch and Siemens Home Appliance Group (BSH), after hitting rock bottom late last year, is cashing in on the sharp rebound of the Chinese economy.

The appliance titan has experienced a nearly 40-percent rebound in Chinese sales since this April. In July 2009, its cylinder washing machines outshined rivals with a Chinese market share of 34 percent.

On September 23, BSH opened a $70-million plant in Nanjing, Jiangsu Province, to produce energy-efficient washing machines as part of its efforts to tap into the Chinese market, its second largest overseas market after the United States.

"We have taken a bullish outlook on the Chinese market and plan to step up investments of up to 200 million yuan ($29.3 million) annually over the next three years," said Roland Gerke, CEO of BSH.

With a substantial turnaround in real estate markets and powerful policy incentives, the Chinese appliance market is bound for a significant uptick, he added.

Electronics Boom

China's fixed-asset investment in the electronics industry in the first 10 months of this year increased 17.5 percent year on year, with a sharp rise in the telecommunications and personal computer sectors, said the Ministry of Industry and Information Technology.

Only minor decreases occurred, isolated in the electronic component and semiconductor industry investments which fell 2.2 percent and 17.8 percent, respectively.

PricewaterhouseCoopers China said in a report the drops were triggered by ripple effects from the global economic downturn and the decline in the transfer of electronic equipment production from the Western world to China.

Since 2001, China's semiconductor consumption has enjoyed a nearly 30 percent year-on-year growth rate. But the market has passed through its peak development period and is settling near the average world growth level, said the report.