China Development Bank’s plan to bid for Dresdner Bank in Germany failed in large part because Chinese leaders refused to agree to the deal in time, in a sign of Beijing’s increasingly cautious attitude to investments in western financial institutions.

The hesitancy of China’s state council to approve a potential $10bn bid for a majority stake in Dresdner is another indication of Beijing’s caution after investments in western counterparts last year, most of which have fallen in value.