With symbolism abounding, the U.S. and Chinese economies are likely to be further wedded with news that China’s biggest auto manufacturer, SAIC Motor Corp., is set to buy a 1 percent stake in U.S. car maker/American icon General Motors.

China already is America’s biggest debt holder, and an ongoing spat over currency values has shown that the world’s second-largest economy is coming into its own. –JCL

The Wall Street Journal:

In a sign of the changing fortunes of the world’s top two economies, China’s biggest auto maker, SAIC Motor Corp., is negotiating to acquire a stake of about 1% in General Motors Co. worth about $500 million, according to a person familiar with the matter.

The U.S. auto maker also is prepared to sell more than $1 billion worth of shares to sovereign wealth funds in the Middle East and Asia. Combined, the sales would give foreign investors roughly 16% of the shares to be sold next week under an initial public offering of stock, and give them a stake of some 4% in the Detroit auto maker. GM declined to comment on the investment talks.

The issue of overseas investors buying GM shares in the company’s IPO has been a sensitive one for the U.S. government, which plans to reduce its 61% stake in the auto maker to around 35% through the IPO.

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