Less than a fortnight ago Coca-Cola executives were cutting a ribbon on a new $90m innovation and technology centre in Shanghai, having just pledged to invest $2bn in China – more than last year's total capital spending – by 2012. Now, after a knockback from the ministry of commerce, the group's plans to acquire the country's largest juice-maker at a ridiculous premium lie in ribbons. So much for buttering up Beijing.

China never really wanted a formal competition regime in the first place. It was a condition of joining the World Trade Organisation in 2001 that China introduce some kind of legislation; it finally got round to it last August, producing a law that bears only a passing resemblance to international norms. Article 7 introduces the strange concept of a “lifeline of the national economy”, to be protected as a matter of “national security”.

Article 31 appears to devolve powers of approval to other bodies, “if state security is involved”. Either of these seems as good an explanation of the Coke/Huiyuan decision as the official citation: Article 28, on restriction of competition, implying that Coke would leverage its dominance in fizzy drinks to become a one-stop shop for retailers. The combined market share in juice would have been about 20 per cent – well short of standard understandings of dominance.