Australian Prime Minister John Howard is in China this week, talking up the new-found economic co-operation between the two countries. But one Australian icon, the brewing company Fosters, has just announced it is quitting the Chinese market after an unsuccessful 13-year stint. The Fosters Group announced last month that it had sold the last of its Chinese assets, its Shanghai brewery, to the Japanese brewer Suntory for A$20 million ($113 million). For this major Australian corporation, the China experiment has been a dismal failure. The brewer, which is also the world's second-biggest wine-maker, has lost over A$100 million in China over the past decade. Fosters didn't simply dip its toes into mainland waters: it plunged in head-first, in 1993. The company bought breweries in Guangdong and Tianjin , in addition to Shanghai. The first signs of trouble came as far back as 1998, when Fosters wrote down the value of its Chinese operations by a whopping A$167 million. This forced the sale of the Guangdong and Tianjin interests a year later, while the Shanghai brewery - which produces Shanghai Lager and the Guangming, Qing Yi and Yi Hao brands - limped on until last week. But if Suntory is to be believed, there is not a lot wrong with the Shanghai brewery. The Japanese company already has 54 per cent of the Shanghai beer market, and this purchase of the Fosters asset will give it over 60 per cent. Fosters is not getting out of China altogether - it cannot afford to ignore the rapidly growing Chinese middle class, which is fast acquiring a thirst for premium beers of the type that Fosters produces. The company says it will continue to market its beers in China. Fosters is not the only brewing group from Australia and New Zealand to find the going too tough in China. Last year, Fosters' arch-rival Lion Nathan - after spending 10 years trying to turn a profit - got out of China after sustaining losses of over A$200 million. It's ironic that Fosters should have bombed so spectacularly in China. During the late 1980s and through the 1990s, it aggressively, and successfully, marketed itself in Britain and Europe. In fact, just how successful it has been in Europe, as opposed to China, was evident in the announcement last month that Fosters had sold its brand in Europe to an English company for A$570 million. So why was the Chinese market so hard for a seasoned international player like Fosters and, for that matter, Lion Nathan? The answer, it seems, is quite simple - fierce competition. According to David Cooke, of the investment bank ABN Amro: 'Fosters and Lion Nathan didn't have [the] deep enough pockets that the other players had.' Those other players included the giant American firms Anheuser-Busch and SABMiller, as well as Holland's Heineken. Now we have Fosters heading home with its tail firmly between its legs after spending and losing millions of dollars trying to secure a Chinese base. That sight ought to temper the sometimes wild enthusiasm of the Australian business community and political leaders for all things Chinese these days. There is a tendency for the business and political elite in Australia to get blown away by the staggering size of the emerging Chinese consumer market. Australia has a maturing domestic market of only 20 million people, which provides limited opportunities for growth. The Fosters story is a salutary reminder that, despite the glamour and the hype, it's just as easy to lose buckets of money in China as it is to make it. For every success story that Mr Howard and other Australian politicians will use to illustrate why the proposed Australia-China Free Trade Agreement is a good thing, there are bound to be many more tales like that of Fosters Group. Greg Barns is a political commentator in Australia and a former Australian government adviser