BEIJING - China denied Coca-Cola Co.'s closely watched $2.5 billion bid to buy a major Chinese juice producer Wednesday, highlighting Beijing's rejection of foreign control over its top companies even as they step up acquisitions abroad.

The refusal to allow the foreign acquisition in a non-strategic business such as fruit juice could backfire abroad as state-owned Chinese companies pursue investments in mining and other sensitive industries.

Coca-Cola's acquisition of Huiyuan Juice Group Ltd. was rejected because it would reduce competition and raise prices, the Commerce Ministry said. But the bid also provoked an outcry from nationalists who opposed letting a successful Chinese brand fall into foreign hands.

"At the end of the day, they just want to protect their own brands," said Renee Tai, senior vice president for research at CIMB-GK Securities Pte. Ltd. in Hong Kong. "If it's an established brand with a track record, I think it will be more difficult for foreigners to participate."

Coca-Cola Chief Executive Muhtar Kent said Coke would now focus on existing brands and innovation of new brands, including juices.

"We are disappointed, but we also respect the decision," Kent said in a statement.

Kent reiterated the company's plan to invest $2 billion in China over the next three years to open new plants and distribution channels.

A woman who answered the phone at Huiyuan said no one was available to comment. A ministry official, Chen Rongkai, said there is no way for Coca-Cola to appeal.

Creating profitable brands is a key element in the communist government's development strategy, and officials hope to make Chinese companies more competitive during the current economic slump, in preparation for the recovery of world growth.

China is a top destination for foreign investment and attracted $5.8 billion in February despite a decline amid global financial turmoil. But foreign purchases of existing companies are rare and politically sensitive.

Last year, U.S. investment firm Carlyle Group dropped an effort to buy control of Xugong Group, a maker of construction equipment. Regulators and Xugong's domestic rivals opposed the deal even though the Chinese company sought Carlyle's backing to expand.

In the Huiyuan case, the company's founders and major shareholders endorsed the Coca-Cola deal as a way to improve marketing and product development.

Unlike major Chinese banks, oil producers and phone companies, which were created by government decree, Huiyuan is part of a pioneering group that has succeeded by supplying products customers want to buy.

China's own companies are stepping up acquisitions abroad.