Yep. Many Mainland Chinese companies are former state-owned enterprises and the government retains a stake after they go public. Sometimes these companies do deals not for sound commercial reasons but out of a sense of "national service" -- senior management is looking to score points with the central government by helping China to realise its grand ambitions (like, say, becoming a football superpower).
That may or may not be the case here, but don't be misled by this "owned by the Chinese government" stuff.
More to the point, the 2 Hong Kong-listed companies named in the speculation are basically penny stocks:
* Rui Kang Pharmaceutical Group Investment has a market capitalisation of just HK$190m (about 17m quid). And it has the 4-year share-price chart from hell.
* China Wah Yan Healthcare has a market cap of HK$282m (25m quid). One of its interests, among many, is investment in "distressed assets". Mmm. Its shares, too, have performed very poorly over the past couple of years.
If one or both of these companies are involved in a consortium, you'd better hope the other members have much deeper pockets.