AT FIRST glance, Vodafone has nothing to complain about. OnSeptember 8th it sold for $6.6 billion the 3.2% stake in China Mobilethat it had bought for $3.3 billion between 2000 and 2002. Such ahandsome profit ought to be a cue to crack open the champagne and roastsome Beijing duck. Yet the British mobile-phone giant did not get whatit really wanted: a way into China. In other countries, Vodafone hashad a knack of turning a small investment into a controlling stake, butnot in the Middle Kingdom. And it is not alone.

Since the late 1990s, several large state-owned Chinese companieshave listed their shares. These initial public offerings typicallyincluded “cornerstone” investments by big Western firms. For example,BP, Exxon and Shell (three oil firms) and ABB (a Swiss-Swedishconglomerate) took strategic stakes in PetroChina and Sinopec (two bigChinese oil companies). Alcoa, an American aluminium company, investedin Chalco, a Chinese one. And Western banks bought chunks of theleading Chinese state banks when they were listed.

Foreign firms brought several things to the table: capital,technology, management skills and the prospect of better corporategovernance. The Chinese press often referred to them as “elderbrothers”. In return, these Western firms wanted access to China’s hugedomestic market.

It did not work out that way. The Chinesestate-owned firms did not need capital so badly that they were preparedto cede control to foreigners. Some also found that the Westerners hadless to teach them than they had hoped. “Fly-in” expat managers wereoften unfamiliar with China, says David Michael, a partner at theBoston Consulting Group. Chinese firms tended to learn more frommultinationals that had taken the trouble to build their own largesales forces in China, he says.

Chinese firms no longer feel like little brothers. China Mobile nowhas a market value half as large again as Vodafone’s. PetroChina ismuch bigger than BP. Both Chinese firms are now rich enough to buywhatever expertise they want.

Western energy companies were quick to notice this shift. BP, Shell,ABB and Exxon all sold their holdings in state-owned Chinese firms by2005. Alcoa got out in 2007. Financial firms followed, in whole orpart, during the financial crisis. When China’s state-ownedAgricultural Bank was recently listed, no big Western bank bought asignificant stake.

Western firms grumble about their failure to turn their stakes inChina Inc into a foothold in the Chinese market, but not too loudly, sothat they do not annoy the government. Besides, thanks to a risingstockmarket, most made sacks of money from their investments.

A few have not yet cashed out. Telefónica, a Spanish telecoms firm,owns 8.8% of China Unicom and politely rebuffs bankers who advise it tosell. AT&T has 25% of a telecoms business in the Pudong district ofShanghai. Despite regulatory problems, it provides a nationwide servicefrom Pudong, largely to multinational clients. It is a nice business,but a far cry from the dreams some Westerners once had about China.