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SHANGHAI -- Friction between Shanghai Automotive Industry Corp., a major state-owned Chinese automaker, and its Korean subsidiary Ssangyong Motor Co. has reached a climax.

In early January, Ssangyong filed for bankruptcy protection in Korea. The move sent Ssangyong workers demonstrating before the Chinese embassy last week in Seoul condemning alleged irresponsible behavior of SAIC.

While Ssangyong is a mess, Chinese automakers shouldn't be discouraged about foreign acquisitions. SAIC's missteps in Korea hold valuable lessons.

Lesson one: Because Chinese automakers lack overseas experience, they should start small and proceed cautiously.

SAIC underestimated the challenges when it bought a 49 percent interest in Ssangyong for nearly $500 million in 2004.

Lacking a grasp of Korean politics and with no experience dealing with labor unions, SAIC failed to win the trust of Korean workers. Shortly after SAIC took over, Ssangyong's workers staged a strike. After that, a tug of war between SAIC and the labor union of the Korean SUV maker has never ended.

Moreover, SAIC has made little progress integrating Ssangyong into its operations, including a plan to assemble Ssangyong's SUVs in China.

By contrast, SAIC has handled MG Rover properly. It bought the Rover 75 platform and shipped it to in China in 2005. It has also recruited many former MG Rover engineers to staff its r&d center in England.

That has enabled SAIC to develop its own car brand, Roewe. To date, it has launched the Roewe 750 mid-sized sedan and the Roewe 550 compact. And more are coming.

Lesson two: To go global, you need international talent.

Managers with international experience are few and far between at Chinese automakers.

In 2005 and 2006, SAIC was fortunate to have Phil Murtaugh, a former executive of General Motors with considerable international experience, to spearhead its efforts to grow outside China.

Back then, Murtaugh was also charged with integrating