Jiang Wenran, of the University of Alberta, reports on what the Chinese public thinks about the China National Ofshore Oil Corp (CNOOC) bid for Unocol, and the U.S. response: "The Unocol Bid: China's Treasure Hunt of the Century".
Evidently there is a lively, and basically uncensored, debate on this going on in China:
Puzzled by the strong and negative reaction of Congress, many Chinese question how U.S. politicians measure China’s threat to U.S. national security. They do not seem to understand why CNOOC’s merger with Unocal, which accounts for less than 1 percent of the total U.S. energy supply, could in anyway endanger U.S. national security. They point out that the U.S. Congress has not passed any bills limiting China’s continuous subsidies of the U.S. government deficit by purchasing and holding some $230 billion of U.S. government treasury bonds.
Others have accused the U.S. of hypocrisy and doublestandards. A popular perception is that over the years Western countries have lectured the Chinese a great deal about free markets, comparative advantage, non-intervention of the government and open competition. But now the overwhelming opposition by both American politicians and the U.S. public demonstrates that these principles are only applicable to others for convenience. Many reports also complain that a potential block of the CNOOC takeover of Unocal based on national security grounds will be further proof of U.S. intentions to contain China’s rise as a global power.
Meanwhile, there are plenty of critical reflections on both China’s energy strategy in general and CNOOC’s bidding over Unocal in particular. Some challenge the wisdom of the large cash offer by CNOOC at a time of very high oil prices. The Unocal deal, they argue, is quite contrary to CNOOC’s previous low-risk strategy when it successfully purchased a major Spanish oil company several years ago at oil prices of about $20 per barrel. Critics also charge that not only is the CNOOC offer of $18.5 billion much higher than Unocal’s real value, its commitment of $500 million break-up fees to Chevron and up to $300 million fees for consulting is evidence of a government-backed company that does not feel much pain when it comes to “spending other people’s money.”
Still others claim that China is facing a long learning curve when it comes to playing the great energy game on the world stage. Whatever the outcome of the Unocal bid, they warn, the “China threat” has leaped from the realm of perception to the realm of policy, and China should be prepared to live with that reality. Instead of taking a confrontational approach that is likely to be to China’s disadvantage, many advocate that Beijing should get on the bandwagon with U.S. energy firms by creating a win-win environment, thereby easing the anxieties of the U.S. public. As such, China should ultimately pursue an energy strategy based on increased domestic supply, rather than pay out tens of billions of dollars to continue a treasure hunt abroad. Meanwhile, critics say Beijing may be wise to spend the money on energy conservation and reduce the tremendous waste of energy at home.
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