Tuesday, June 28, 2005

Will Bush block China’s bid for Unocal? 

China National Offshore Oil Corporation’s $18.5 billion bid to buy Unocal has gone to the Committee on Foreign Investment in the United States for approval. This secret federal panel, consisting of operatives from 12 federal agencies, reviews mergers and acquisitions that potentially threaten “national security”. The committee can then ask the president of the United States to block any business deal.

The only US president to block a deal sent up from the committee (that itself deserves to be thoroughly investigated and exposed) was, not ironically, George Herbert Walker Bush, who spiked a bid by the China National Aero-Technology Import and Export Corporation to buy an American aircraft parts manufacturer.

In addition to the likely interference by this committee, politicians from both the Republican and Democratic Parties are sweating bullets, urging Bush to block CNOOC’s bid. A letter to Treasury Secretary John Snow, signed by three southern congressmen (Jefferson, D-La., Green, D-Texas, Jindal, R-La., and Brady, R-Texas) demands an investigation of the national security threat posed by the deal.

In perhaps the most uproarious example of how the “free market” really works, C. Richard D’Amato, chairman of the US-China Economic and Security Review, a congressional “advisory” panel (also known as a lobbying group), blustered that the CNOOC offer was “not a business transaction at all”, and “not a free market deal”, but “the Chinese government acquiring energy resources.”

(I don’t suppose that the Bush administration’s post-9/11 conquest of the area containing 60 percent of the world’s known energy resources, and its persistent interference in Latin America, the South China Sea, and other hot spots, has had anything to do with “acquiring energy resources”. Nah.)

As previously noted (see "CNOOC eyes Unocal", and coverage of China-US conflict at From The Wilderness and other sources) this battle cuts to the heart of the larger superpower conflict that continues to blossom between the US and China over the remaining energy reserves left on the planet.

"China in global quest to quench thirst for oil"

Against the landscape of Peak Oil, what are the chances that Bush will permit China to acquire Unocal, the entity that, in bitter irony, lit the 9/11 match with its Central Asian pipeline politics?


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