And in The Wall Street Journal, no less.
Mr. Fu Chengyu, CEO of CNOOC, the Chinese company that has made an offer for Unocal, has an op-ed piece entitled, "Why Is America Worried?". The piece lays out some fairly strong arguments for the acquisition of Unocal.
His basic argument is simple: this is a normal business transaction and should be evaluated as such. He goes on to point out that 70% of Unocal's oil and gas reserves are in Asia and are committed under long term contracts primarily to Asian nations. He claims that CNOOC will keep in the US the oil that Unocal extracts from the Gulf of Mexico. So, we have nothing to fear about losing oil to China; in fact we may get more oil out of the Gulf than we currently do. Further, he agrees to abide by any reasonable decision of the Committee on Foreign Investment in the US to divest any assets that do not harm CNOOC's core interests in this deal.
And, finally, CNOOC needs UNOCAL's people. Chevron, the other bidder for UNOCAL, has already announced that it will cut jobs. Mr. Fu says he will not.
He has some strong arguments, but does not use one which should impress even our congressmen: engaging China more, particularly via a major US company, will likely result in greater liberalization in that country.
2 comments:
Pete,
I agree that there is a wide gap in our cultures. Neither culture is necessarily better but it is very hard for one side to really understand the other. It may be that serious economic ties might improve each party's understanding of the other.
I agree further that China is the biggest economic and military threat we will be facing over the next several years. The question is what can we do to counter that threat.
The first thing that has to be done is a recognition of the threat in realistic rather than jingoistic terms. I don't think our politicians are ready to think in those terms.
The second thing we need to do is restore innovation to our economy. We can't do that until we improve our educational system, particularly in math and science. Our kids compare poorly to those from other nations in virtually every survey I've seen. Also, the number of graduates in science, engineering and math programs is down.
I don't think we've bought a major Chinese company lock, stock and barrel. But, Bank of America just spent a couple of billion for a piece of a large bank there. And there have been other investments as well.
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