By holing below the waterline AP M?ller-Maersk’s plans for a grand European shipping alliance , the Chinese government has sent a powerful message that it will not hesitate to block deals deemed detrimental to corporate and consumer interests in the world’s second-largest economy.

It is the first time that China’s commerce ministry has ever moved to reject a transaction that did not involve a Chinese company. Beijing insisted on adjustments to the terms of last year’s Glencore-Xstrata merger and rejected Coca-Cola’s bid for a Chinese juice company in 2009. The proposed Rio Tinto- BHP Billiton merger in 2010, was abandoned before Beijing could weigh in.

“We were a bit nervous about whether the Chinese government would actually say no,” says Willy Lin of the Hong Kong Shippers Council, which had urged Beijing to reject Maersk’s P3 Network with Switzerland’s Mediterranean Shipping Company and CMA CGM of France. “China’s competition law gives the government the right to investigate deals. It was a good opportunity to tell the world that the law is here and they will enforce it.”