The premier of the German state of Hesse, which is helping to finance GM's Opel operations, on Friday rejected a plan by Beijing Automotive to take over the carmaker.
Premier Roland Koch said BAIC could not submit a very attractive offer for Opel, as it was a "very, very small" company, and he reiterated that Canadian auto parts supplier Magna was the frontrunner to buy Opel.
"There is a preferred bidder, and only when that deal falls through will the others be in the running again," Koch said on the sidelines of a meeting of Germany's Bundesrat upper house of parliament.
Koch was joining a chorus of voices opposing the BAIC bid. The state of Thuringia, which is also helping finance GM's Opel operations, said on Tuesday is opposed the bid.
BAIC's non-binding offer document, which was sent to GM on July 2 and obtained by Reuters on Tuesday, shows that the state-owned group would use Opel's brand and technology to tap the huge and growing Chinese market and sell nearly half a million cars there.
BAIC's plans, which could make Opel a major player in China by 2015, hinge on GM agreeing to share cutting-edge technology such as fuel cells and hybrids.
"With BAIC, I see a big danger that this company, that produces 12,000 vehicles a year, does not have the necessary competence and will not be up to the task at hand," Oliver Burkhard, a regional leader of industrial union IG Metall, told Reuters on Friday.
"There is no alternative to Magna," Burkhard said.
