The news broke this morning. Distressed U.S. automaker General Motors has succeeded in selling one last lemon before going bankrupt.

Virtual-unknown Chinese industrialist Sichuan Tengzhong Heavy Industrial Machinery volunteered for the role of sucker last night, and will pay an undisclosed sum (reported to be less than $500 million) to purchase the smoking hulk of what was once GM's monument to consumer excess: Hummer. In so doing, China follows in the footsteps of Japan, which was reviled in the 1980s for "buying up America" when cash-rich electronics shops like Sony (NYSE:SNE) bought up icons like Columbia Pictures and Rockefeller Center.

This isn't China's first foray into buying bad U.S. assets, but I believe it's may be its worst. In the early days of the credit crisis, China used its sovereign wealth fund to sink billions into private equity magnate Blackstone (NYSE:BX) in March 2007, then spent billions more to acquire a 10% stake in Morgan Stanley (NYSE:MS) in December 2007.

Want to know how that worked out for 'em? Morgan Stanley has declined approximately 40% since then and Blackstone is down even worse. By March of this year, China was down some $80 billion on its U.S. investments -- investments it thought it had been buying up at fire-sale prices.

Sell the rumor
Rumormongers are already hard at work selling the story: China doesn't want to sell Hummers per se. It wants to reverse-engineer the GM beast to figure out what makes the AM General HMMWV tick -- and build itself an uber-jeep.

In my opinion, that could have a ring of truth to it. After all, I find it difficult to believe that savvy Chinese investors believe there's a future in selling hulking, 12-mpg monstrosities to cash-strapped consumers. Not when they've got two great homegrown oil magnates like CNOOC (NYSE:CEO) and PetroChina (NYSE:PTR) to remind them of how costly oil has become, and how difficult it is to find more. In the most recent J.D. Power Vehicle Dependability Study, Hummer ranked 31st out of 38 automakers surveyed -- just ahead of Toyota's (NYSE:TM) Scion unit, and behind Chrysler's Jeep brand.

Foolish takeaway
Sichuan Tengzhong's plans to retain Hummer's current management in place and continue building the beasts in the U.S. suggests the Chinese may yield the worst of all possible worlds. Retaining the people who ran Hummer into the ground, while eschewing cost savings from shifting production to China, this Hummer acquisition could be a real buzzkill.

Fool contributor Rich Smith does not own shares of any company named above. Nor does he own a car, now that his trusty S-10 has finally bit the dust. CNOOC is a Motley Fool Global Gains recommendation. The Motley Fool has a disclosure policy