“We cannot, in my opinion, afford to have a major U.S.
energy supplier controlled by the communist Chinese.”
China Tells the U.S. Congress to Butt
Out
There is some heavy talk coming out of China over CNOOC’s takeover of Unocal Oil.
China demanded that Congress “correct its mistaken ways” and permit the
CNOOC/Unocal takeover to go through.
In China's own words: “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. CNOOC’s bid to take over Unocal
is a normal commercial activity between enterprises and should not fall victim to
political interference.”
CNOOC is 71% owned by the Chinese government and very much a state-owned and
state-operated enterprise.
What upset the Chinese was the 398-15 passage by the House of Representatives of a
non-binding resolution that calls on the Bush administration to block the CNOOC bid
because it “would threaten to impair the national security of the United
States.”
Representative William Jefferson of Louisiana summed up the general feeling of Congress.
“We cannot, in my opinion, afford to have a major U.S. energy supplier controlled by
the communist Chinese.”
Things are going to get ugly.
But this isn’t the first Chinese takeover of a U.S. business. Earlier this year,
Lenovo Group bought the PC division of IBM and Haier Group is in the process of buying
Maytag.
Nor will it be the last. Ran Rui, a professor at Fudan University in Shanghai, warns:
“We invest too much in U.S. federal bonds, and they don’t make us much money.
Now we’re learning to invest more wisely, to try to invest in American companies and
industries.”
Why is this happening? It’s the natural consequence of our massive — and still
ballooning — trade deficit with the fastest growing economy on the planet. China has
amassed $650 BILLION of foreign exchange reserves, most of which has been plowed into U.S.
Treasury securities.
What you and I think about the CNOOC/Unocal deal is a side issue. The primary issue is
that the struggle for Unocal, and all its political ramifications, are just more symptoms
of the worldwide battle for a scarce commodity (OIL) ... and another sign of where its
price is headed (UP).
China Tells Congress to Butt Out by Tony Sagami |
