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Marc Flemming
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Post Rival Chinese Oil Company Makes Bid for Unocal post #1  quote:



Source: New York Times

quote:
President Bush's initial response to the proposed takeover of a major American oil company by a Chinese rival has been to duck. It is not hard to see why.

The $18.5 billion offer by the China National Offshore Oil Corporation for Unocal, which had already made a deal to be acquired by the American oil giant, Chevron, is forcing the administration to confront its own internal rifts over whether China should be viewed as friend, foe or something in between.

It is putting a spotlight on a host of related economic and foreign-policy issues - from North Korea's nuclear program to America's growing dependence on foreign capital and the upward pressure on gasoline prices caused by China's thirst for oil - that defy easy solutions.

Hardly a week goes by without Mr. Bush vowing to make America less dependent on foreign sources of energy, so any deal that increases that dependence - or is even perceived as doing so - would create a problem for him.

And the situation has left the administration once again confronting the likelihood that its numerous ties to the oil industry will become a political issue.

"It's nothing but a headache for them," said James B. Steinberg, who was deputy national security adviser under President Bill Clinton.

For now, the administration is in a holding pattern. With no deal yet agreed to, Treasury Secretary John W. Snow told the Senate Finance Committee on Thursday that the issue remained hypothetical. The White House has avoided substantive comment on the matter.

People inside and outside the administration who are involved in the matter said the White House would do its best to avoid taking a position for a while by referring a deal, if one is completed, to a body known as the Committee on Foreign Investments in the United States, which reviews sensitive acquisitions by companies from abroad on the basis of national security.

"We have so much on the plate with China," said an adviser to Mr. Bush, who would speak only on the condition of anonymity because the president discourages unauthorized discussions about internal deliberations. "How do you come down hard on them for this deal?"

Dealing with energy policy has always been politically fraught for Mr. Bush, who got his start in business in the mid-1970's as an independent oilman in West Texas and who has often been cast by his opponents as a tool of the oil industry. Vice President Dick Cheney is even more of a lightning rod for that type of criticism, having led Halliburton, the giant oilfield services company, before joining the Republican ticket in 2000.

Secretary of State Condoleezza Rice was a director of Chevron for a decade before Mr. Bush's election, and even had a Chevron tanker named for her. (The tanker has subsequently been renamed.)

Even if he were inclined to take a strong stand on the takeover, Mr. Bush would still have to navigate divisions among his advisers over how to proceed.

In recent months, the Pentagon and the State Department have been taking a harder line toward China, reflecting a broader push by conservatives in and out of government.

In a speech in Singapore this month, Defense Secretary Donald H. Rumsfeld criticized China for stepping up military spending in the absence of an obvious threat, and said growth in political freedom in China has not matched economic growth. State Department officials have been blunt in stating that China has not done enough to use its economic clout to press North Korea into serious negotiations about ending its nuclear program.

Even before the oil deal was in the headlines, the White House was working furiously to file the rough edges off a soon-to-be-released Pentagon report on China that described the country as a potential military threat. And in just two weeks, Ms. Rice is expected to land in Beijing, pressing anew for help on North Korea and making the point that if the North refuses to give up its nuclear program, the administration wants China to join in on sanctions. The Chinese have made clear they want to avoid that at all costs.

But if Mr. Bush's national security advisers have tended toward a more hawkish view of late, his economic team has by and large viewed China as a vast market to be opened, a vital source of capital for the United States and a country whose political liberalization can be encouraged through economic engagement. Taking punitive action against China now, Mr. Snow told the Senate Finance Committee on Thursday, would be counterproductive.

It is still not clear where some of the major players in the internal debate, especially Mr. Cheney, the primary architect of the administration's energy policy, may come out.

"It will require some presidential leadership to address this array of issues and assign priorities and deal with the politics," said Richard C. Bush, a senior fellow at the Brookings Institution who is an authority on China.

The coming talks with Beijing over North Korea's nuclear threat come against the backdrop of a trans-Pacific relationship that grew warmer after a rocky start at the beginning of the Bush administration. But the diplomatic maneuvering has been subject to periodic flare-ups of tension over a variety of issues, including Taiwan and China's support for Iran, a major supplier of China's oil.

"Remember, to the Chinese everything is related: the economics, the diplomacy, the military posture. It's all one," said a senior administration official, who declined to speak on the record because of the sensitivity of the diplomacy.

The White House's reasons for playing for time, and avoiding any immediate escalation of tensions with Beijing, start with the fact that its most urgent diplomatic priority right now - defusing the nuclear threat from North Korea - depends to a great extent on cooperation from China. That effort is entering a crucial phase.

But there are other strategic reasons to keep the relationship on an even keel. The financial stability of the United States, with its chronic budget deficits and propensity to spend far more than its saves, depends increasingly on the willingness of China to buy American government bonds. Any breach in relations could lead to higher interest rates.

At the same time, the administration is trying to contain a protectionist backlash aimed not just at China but at Mr. Bush's free-trade philosophy in general. Congress has already grown impatient with what many members of both parties see as China's unwillingness to play by the rules of the global economy; any steps that inflame anti-China feelings could give new impetus to efforts to impose tariffs or other trade sanctions over the White House's objections.

The proposed deal presents Mr. Bush himself with a tough trade-off when it comes to economic openness. Mr. Bush has long lauded the benefits of reduced barriers to the flow of goods, services and money, and for the most part his administration has welcomed investment by China in American companies. This year, the administration approved I.B.M.'s sale of its personal computer business to a Chinese company, Lenovo. This openness also works in the other direction: Bank of America said earlier this month that it would pay $2.5 billion for a stake in China Construction Bank.

Mr. Bush has made "energy independence" one of his defining themes. While the Chinese in this case say they would not be taking oil away from the United States, the deal's opponents suggest that it would place a vital resource in the hands of a nation that has a voracious and growing appetite for energy to fuel its rip-roaring economic expansion.

The proposed oil deal is also a window into a much broader and even more complex topic: how the United States should manage its role in the global economy.

In the Clinton administration, globalization framed much of the debate about foreign and economic policy. Mr. Bush has tended not to view the world through the same prism, and, especially since the 9/11 terrorist attacks, globalization has been distinctly subordinated to security issues as a policy consideration.

But the forces that globalization encompasses have continued to reshape national economies and individual lives as jobs and money migrate across borders, and companies and markets adapt. And because of its high profile, the Chinese offer for Unocal could lead Mr. Bush to enunciate more of the principles he thinks should guide the painful trade-offs that globalization often requires.

"This is a piece of the larger and single most important challenge facing Americans," said Rahm Emanuel, who was a senior adviser to Mr. Clinton before being elected to Congress as a Democrat from Illinois in 2002. "How do we compete in a global economy we know is good for us but that individually leads to less security rather than more opportunity? Unless we deal with that as a country, we will lose our predominant position."



Old Post 06-26-2005 04:37 PM
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post #2  quote:

Can anyone see what a sellout the US is to global interests????

They shouldn't have snuck free trade with China in back during the smoke and mirrors of the 2000 election if this is an issue....

Doesn't anyone in Washington have foresight?
Or is the only foresight they have simply that which lines their pockets and their buddies pockets?


Old Post 06-26-2005 10:26 PM
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Post post #3  quote:

quote:
More...

China tells U.S. not to meddle in oil deal

China expressed opposition to interference in a government-controlled oil company's bid for the U.S.-based oil company Unocal, state media said Wednesday.

Foreign Ministry spokesman Liu Jianchao said that China National Offshore Oil Corporation's $18.5 billion offer for Unocal was "normal commercial activity between enterprises."

Liu said "economic cooperation between China and the U.S. serves the interests of both sides and commercial activities should not be interfered in or disturbed by political elements."

There are growing concerns in Washington over the deal as some U.S. officials are uncomfortable with CNOOC, 70 percent owned by the Chinese government, controlling a major player in the U.S. energy sector.

Xinhua reported Wednesday that CNOOC Chief Executive Fu Chengyu is heading to the United States for negotiations and to dispel concerns over the deal.


Old Post 06-29-2005 04:38 PM
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post #4  quote:

This sounds like the perfect plot in a Wesley Snipes movie....
a sequel to "The Art of War."


Old Post 06-29-2005 04:42 PM
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post #5  quote:

ChevronTexaco to Purchase Unocal for $16.4 Billion
Bloomberg 4apr2005


ChevronTexaco Corp., the second- largest U.S. oil company, agreed to buy Unocal Corp. for $16.4 billion in stock and cash to increase reserves in Asia, the world's fastest-growing energy market.

http://www.mindfully.org/Industry/2...nocal4apr05.htm


Old Post 01-02-2006 04:52 PM
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post #6  quote:

UNOCAL was docketed to build a pipeline through Aghanistan during the late 1990's...unable to do so because of the Taliban and other unruly factions....

However, 9-11 changed all that, now didn't it?


Old Post 01-02-2006 04:57 PM
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post #7  quote:

So it's perfectly Ok for the US to buy Chinese activites like banks and it is perfectly OK for the US to set up compnaies in China to exploit cheap labour it is alos OK for the US to complain about Beijings military spending Hmm pot kettle and black don't you think? it's also OK for the US to get Chinas influence on the Korea issue, It is also Ok for the Chinese to but US bonds and it is OK for US compnaies to buy oil intrests in countries like Russia but when a Chinese company wants to but US oil intrests then the game changes. Fact is the Chinese have done nothing wrong in terms of this deal it is normal activity that happens a lot in any year. Unocal could have rejected the offer but they did not if this was a UK company buying the company nobody would have batted an eyelid as it would have been seen as normal.

As for China not playing the by the rules of the global economy well we know that in terms of trade the WTO has had no investigations into Chinese activites in since they joined in 2001 mainly because there have been no complaints. we also know China attracts huge amounts of inward investments just like the US did, China is the number 1 draw for foreign investment guess who used to be the number 1 and is pissed about now being number 3?. We know that China buys bonds from the US but agin perfectly legal and we know know that Chinese compnaies are expanif abroad and buying foreign compnaies again just like all western countries so exactly waht laws on the global economy are being broken.


Old Post 01-02-2006 06:40 PM
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post #8  quote:

Excellent points lodgebo....

quote:
so exactly waht laws on the global economy are being broken.


None. This is what can be called, "the perfect crime," or even better..."business as usual for the New World Order."

Very neat and tidy on the outside...while beneath another completely different story.


Old Post 01-02-2006 07:14 PM
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