Tuesday, July 05, 2005
Chi-Coms - No Government Meddling In Business
This is what happens when you believe your own press.
China is a communist country. That means the government controls everything you see, read, hear, or are otherwise exposed to. At least the government believes that.
Well, now it looks like China's Foreign Ministry thinks everyone else in the world operates under the same rules. They have "demanded" the United States Government cease meddling in China's largest energy corporation's (CNOOC Ltd) attempt to buy UnoCal. They say this:
We demand that the U.S. Congress correct its mistaken ways of politicizing economic and trade issues and stop interfering in the normal commercial exchanges between enterprises of the two countries. CNOOC's bid to take over the U.S. Unocal company is a normal commercial activity between enterprises and should not fall victim to political interference. The development of economic and trade cooperation between China and the United States conforms to the interests of both sides.Seems like the Chi-Coms don't understand the hesitation of the US government to endorse the takeover of a large domestic energy producer by a company wholly owned by a communist government.
My take on this is very simple. The demand for the US Government to butt out of a domestic energy issue by a nation whose government dictates all aspects of its own economy is laughable. The CNOOC bid is not a "normal commercial activity between enterprises". CNOOC is an agent of the Chinese government and should be treated as such. If CNOOC wants Unocal's capabilities, it should build them itself.
The short answer to the CNOOC bid is simple - No Dice. Go buy someone else.
Here endeth the lesson.