The Next Chinese Threat

[NATO AIR]

oil, baby, all about that oil...

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/07/AR2005080700884.html

The Next Chinese Threat

By Sebastian Mallaby

Monday, August 8, 2005; Page A15

Last week congressional bullying drove China to abandon its bid for Unocal, a small California-based oil company. Anyone inclined to celebrate should focus on the likely sequel: China will redouble its efforts to buy energy and other resources in shaky developing countries. This will undermine Western efforts to promote transparency and fight corruption there, damaging U.S. interests and values far more than a Unocal takeover.

To see why this is so, begin with China's motives. China wants to control supplies of oil and other commodities because it's scared of price shocks; owning oil or other mineral reserves provides anti-shock insurance. As Chinese economists argue, their economy is extremely vulnerable to external shocks because it's extremely open. The Unocal defeat is not going to stanch China's drive to buy foreign resources.

China has two ways to do that. It can buy Western resource companies: That was the Unocal strategy. Or it can do deals in resource-rich developing countries, which tend to be plagued with corruption, human rights abuses and other unsavory practices. To cite just two of many examples, China has invested in Sudan and Zimbabwe, propping up both countries' unspeakable dictatorships.

As far as Western interests are concerned, these Chinese resource investments may sound like a marginal threat. But they go to the heart of the most promising growth area in development policy. Old development was based on aid and trade, but there's a limit to how much aid poor countries can absorb, and trade isn't a panacea. New development adds a third tool: a focus on governance and transparency in poor countries and also, crucially, among the outside governments and firms that deal with them.

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[Annie]

oil, baby, all about that oil...

Right now, China has the oil, expensive or cheap-relatively speaking. Just remember what FDR did with Japan, which is what is behind the UNOCAL deal...

 

[NATO AIR]

Right now, China has the oil, expensive or cheap-relatively speaking. Just remember what FDR did with Japan, which is what is behind the UNOCAL deal...

though in the end, i would have let the chinese buy unocal, in exchange for allowing us to buy similar chinese companies.

 

[Annie]

though in the end, i would have let the chinese buy unocal, in exchange for allowing us to buy similar chinese companies.

What similar chinese company????

 

[NATO AIR]

What similar chinese company????

There are fledgling resource companies (still ominiously owned by military players) in China...

 

[Annie]

There are fledgling resource companies (still ominiously owned by military players) in China...

Sorry, nothing like UNOCAL, besides which, Why would we give an enemy arms?