Thursday, June 23, 2005

When unbounded capitalism meets painful reality.

Oh, Jesus. From this morning's LA Times:

A major Chinese oil company made a landmark offer to buy California-based Unocal Corp. for $18.5 billion on Wednesday, topping a bid by rival U.S. oil giant Chevron Corp. and setting the stage for an intense political debate over the future of U.S. energy, security and trade policies.

The unsolicited offer by CNOOC Ltd., an arm of state-owned China National Offshore Oil Corp., was the most dramatic example yet of China's growing influence in global markets and would be China's largest foreign acquisition by far.

So, normally, this would be just another story of a multi-billion-dollar takeover attempt -- not really news any more, but it's that national security aspect that kind of makes things interesting.

The proposed buyout could raise hackles in the United States, which is heavily dependent on foreign oil. China's fast-growing economy is consuming ever-larger amounts of crude, which is helping to drive the price to record heights on world markets, and CNOOC wants to add Unocal's assets to its energy reserves.

So who's got their panties in a bunch over this scenario? Oh, look:

One congressman, Rep. Richard W. Pombo (R-Tracy), said he didn't believe it was "in the best interest of the United States to have Unocal owned by the Chinese national government," adding that the deal could have "disastrous consequences for our economic and national security."

Pombo and Rep. Duncan Hunter (R-El Cajon) sent a letter to President Bush last week urging him to look closely at any Chinese bid to acquire U.S. energy assets. Such an attempt "raises many concerns about U.S. jobs, energy production and energy security," their letter said.

And gosh, I'll just bet you thought the Republicans were such avid fans of unfettered capitalism, less government regulation and the power of the free market, didn't you? Apparently, not always. Who would have guessed?

(By the way, you remember Duncan Hunter, don't you? Is this really the man you want monitoring the security aspects of multi-billion-dollar, international energy deals? But I digress. Onward.)

And what's everyone worried about, anyway? So what if "China's fast-growing economy is consuming ever-larger amounts of crude." What's the big deal? After all, these guys aren't worried. And, remember, they're experts.


Anonymous said...

You're painting them all with the same brush. I'm sure many of them are worried about energy futures.

CC said...

Well, sure, I could be fair and balanced, present both sides of the argument, make sure I'm providing an accurate and representative sampling of opinions in the industry and so on.

Where the hell's the fun in that?

Lindsay Stewart said...

perhaps hunter will make a persuasive argument against the takeover by displaying a platter of szechuan chicken and steamed rice. oh, and anonymous comments are just so cowardly. but in all fair and balancedness, i too am sure many of them are worried about energy futures. why they can hardly justify leaving rapacious profiteering and environmental disregard in the hands of them stinkin' commies. that be the amurikan mission as ordained by gad.

W.C. Varones said...

The Cnooc bid, and the many other Chinese bids for American firms that will follow, are the predictable result of the huge trade imbalance. All those dollars we're giving them have to go somewhere.

The trade imbalance, in turn, is the result of an out-of-control American consumer, egged on by Alan "easy credit" Greenspan.

China's boom, and America's indebtedness, is the American consumer's doing. Let's hope China doesn't use its new prosperity to fund military aggression.