SHANGHAI, July 4 -- The Chinese government on Monday sharply criticized the United States for threatening to erect barriers aimed at preventing the attempted takeover of the American oil company Unocal Corp. by one of China's three largest energy firms, CNOOC Ltd.
Four days after the House of Representatives overwhelmingly approved a resolution urging the Bush administration to block the proposed transaction as a threat to national security, China's Foreign Ministry excoriated Congress for injecting politics into what it characterized as a standard business matter.
"We demand that the U.S. Congress correct its mistaken ways of
politicizing economic and trade issues and stop interfering in the normal commercial exchanges between enterprises of the two countries," the Foreign Ministry said in a written statement. "CNOOC's bid to take over the U.S. Unocal company is a normal commercial activity between enterprises and should not fall
victim to political interference. The development of economic and trade cooperation between China and the United States conforms to the interests of both sides."
Those words, the latest rhetorical volley in an escalating trade
battle, officially elevated the takeover battle for Unocal into a bilateral
issue involving Washington and Beijing, raising the stakes of the outcome.
CNOOC's bid comes as China's emerging force in the global economy
continues to sow international tensions over competition for natural resources, impacts on the environment, trade balances and security relationships. The deal would be the latest in a string of Chinese purchases of foreign companies as Beijing encourages domestic firms to seek new markets abroad and secure raw materials for China's aggressive industrialization. The Chinese government has
urged energy companies in particular to buy foreign oil fields as China's consumption soars, deepening worries about the country's access to supplies.
Already, CNOOC's bid has taken China across a new threshold: It has
unleashed the first takeover battle between a Chinese company and a U.S. firm, the oil giant Chevron Corp., which has its own deal to buy Unocal, for $16.5 billion. If completed, CNOOC's purchase -- its bid is for $18.5 billion -- would be the largest foreign takeover ever made by a Chinese firm.
But as the price of oil continues to soar, underscoring the finite
supply of global stocks, some members of Congress portray China's appetite for energy as a threat to U.S. interests. They are painting CNOOC's effort to buy Unocal as an attempt to siphon off oil that would otherwise land in the United States, a proposition that analysts call dubious because most of Unocal's outstanding contracts supply customers in Asia...
There's no way in Hell the United States government can let this deal go through. That said I'll be extremely interested to see if the stockholders of UNOCAL put patriotism and national security over the $2 BILLION net gain from the bid made by CNOOC. With oil at $60 a barrel and predictions that gas may climb to $3 a gallon by summer's end we need to be fiercely protective of our own oil reserves. I fully anticipate a nice proxy bloodbath over this one.
China has proven to be a formidable economic adversary but it's their militaristic and dogmatic approach to foreign affairs that frightens the bejesus outta me. They'd just as soon shoot first as negotiate. And if they attempt to seize Taiwan the shit's really gonna hit the fan. Between China and N. Korea this country has its work cut out for it in SE Asia. According to the CIA fact book China has over 13 MILLION males reach military age anually and their total manpower availability (males 18-45) is over 340 MILLION. We need to arm Japan and S. Korea to the freakin' teeth.
