Guy de Jonquières of the Financial Times can't figure out why so many people in the U.S. are concerned about the bid by the Chinese firm, Chinese National Offshore Oil Company(CNOOC) to buy Unocol.
"China exposes US insecurity" (June 27):
America’s China-bashers claim a CNOOC takeover would imperil US security. Yet Unocal is a second-tier oil and gas company, most of whose production is in Asia and under long-term contract to customers there. CNOOC has said it will operate Unocal’s US business at arm’s length and sell it, if Washington so requires. Even if the US bought Unocal’s Asian oil, it lacks enough west coast refineries to process it. So much for scare stories about China meeting its energy needs by filching US supplies.
Critics also complain it is unfair that China can bid for US companies, when the latter cannot acquire Chinese state-owned enterprises. Yet Beijing is desperate to sell the two thirds of the equity the state still owns in China’s 1,377 listed companies, in an effort to speed stock market reform. US investors are spoilt for choice. Most, knowing the quality of most SOEs, are wisely keeping their distance.
A third argument is a little more sophisticated but just as muddled. It is that since Bill Clinton decided in 1994 to engage China economically by abandoning the ineffectual US policy of linking trade with human rights, Beijing has failed to change its authoritarian regime. Therefore, it is said, the US should revert to a hardline stance...
...It is not even historically accurate. Mr Clinton’s volte-face, and the US decision in 2000 to guarantee permanent market access for Chinese exports, were prompted mainly by heavy lobbying by US companies anxious to expand in China. Achieving political change there was, at best, a secondary objective.
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