Why So Scared Of China?

[NATO AIR]

I agree with him (kathianne this is what we talked about in the China thread yesterday)

http://www.techcentralstation.com/081205H.html

Why So Scared of China?

By James K. Glassman Published 08/12/2005

Congratulations, Chairman Duncan Hunter (R-Calif) of the Armed Services Committee, Lou Dobbs of CNN, Sen. Byron Dorgan (D-ND) of the Midwest isolationist caucus, and all the rest of the xenophobic crew.

By misleading and frightening the U.S. public, you've managed to erect enough obstacles to force the Chinese oil company CNOOC last week to withdraw its bid for a tiny U.S.-based oil company called Unocal.

Why is the strongest nation in the world -- a country with an economy larger than its next five competitors combined -- scared about the takeover of a truly minuscule American firm?

Loss of will, lack of confidence, ignorance? I am not really sure, but the damage has done. The big losers are the American people, who, if this trend continues, will surely face higher prices, higher interest rates and a less dynamic economy.

The only winners are the shareholders of CNOOC, whose stock quickly rose 5.5 percent on news that the offer was being scuttled. The reason is simple: CNOOC was overpaying. In my view, if the Chinese want to hand Unocal's shareholders too much money -- the way that the Japanese did when they went on a U.S. real estate shopping spree in the 1980s -- we should have enthusiastically said, "Yes, go ahead!"

Instead, we cowered in our bunker.

Unocal in 2004 produced just 70,000 barrels of petroleum a day. That's less than one-half of one percent of U.S. consumption and less than one-tenth of one percent of world consumption. Only one-third of Unocal's reserves -- and none of its refineries -- are in the U.S.
CONTINUE ARTICLE @ LINK

 

[Annie]

I agree with him (kathianne this is what we talked about in the China thread yesterday)

I've read all the reasons why, still feel more like this:

http://www.blogginwallstreet.com/2005/06/china-threats-not-idle.html

China Threats Not Idle
Official warns vs any efforts to 'starve' China of energy - Oil and Gas

"...U.S. Rep. Joe Barton, a Texas Republican and head of the House Energy and Commerce Commission, wrote to Bush calling Cnooc's bid for Unocal "a clear threat to the energy and national security of the United States."

CNBC just had Rep. Barton on and I was pleased to hear his sentiments and concerns echoed my own very closely. This is someone in a position to understand the long-term implications, something companies and businessmen do not concern themselves with.


CNBC just had Rep. Barton on and I was pleased to hear his sentiments and concerns echoed my own very closely. This is someone in a position to understand the long-term implications, something companies and businessmen do not concern themselves with.

I am very much a free market capitalist, but I am not religiously fanatical about it. I recognize that there are flaws, and this is one of them. The extremist free market theorists don’t understand the situation. It’s an extreme anti-government Libertarian argument. There are situations that need some degree of centralized control.

For example as soon as we let go of control of the energy markets, Enron was the result. Similarly, it’s been understood for very many years that we can’t have numerous power companies or phone companies operating on the same turf unless they share the infrastructure. Thus these markets have to be regulated.

What we’re going to learn as globalization grows is that it too will require an increased level of regulation, however unpleasant that may be to some of us. China’s bid for Unocal makes this clear. And it’s a good thing to that we’ve gotten such an extreme example so early on. Otherwise we’d be at risk of wandering aimlessly down the wrong path unaware of our mistake until it’s too late to turn back. Even in this case I’ve heard numerous free market proponents and politicians in favor of the deal cite cases of precedent. Fortunately they are few and there are easy to define important differences.

What we have to be concerned with is the precedent that allowing this deal would set for increasingly precarious future deals. I see this deal as being similar to the way Native Americans slowly sold away their lands and signed worthless peace treaties.

It is probable that the Chinese would like to control world’s oil markets. This is something the U.S. is incapable of doing with our free market mentality. But the Chinese believe in precisely the opposite. They believe in a planned society. Having such a belief enables the Chinese government to allocate revenues in way it chooses too, including gradually acquiring more and more of the world’s oil interests.

We know that in the long run planned societies are inefficient and don’t work. But it’s the short run that we must be concerned with. In the short run planned societies are very good at following skewed strategies like building up armies and weapons or wreaking economic havoc. In the short run it is completely possible for the Chinese to use the money we give to it buying cheaply made goods, to buy more and more of the world’s oil interests to the point that it carries more weight than OPEC. And we’d willingly hand it over to them calling it capitalism.

 

[NATO AIR]

I've read all the reasons why, still feel more like this:

http://www.blogginwallstreet.com/2005/06/china-threats-not-idle.html

Its a matter of how we want to handle China. Rather than constricting investment, I would encourage and then demand an open playing field for American businesses. Make us the champion of everybody else in the world who wants to continue to invest in China. Tighten our bonds so that the generals start seeing the peril of igniting a war that would tank their country's future, even if they won.

I would also rather us be all over the place, signing contracts and gaining resources in places as diverse as West Africa and SE Asia.

 

[Annie]

Its a matter of how we want to handle China. Rather than constricting investment, I would encourage and then demand an open playing field for American businesses. Make us the champion of everybody else in the world who wants to continue to invest in China. Tighten our bonds so that the generals start seeing the peril of igniting a war that would tank their country's future, even if they won.

I would also rather us be all over the place, signing contracts and gaining resources in places as diverse as West Africa and SE Asia.

We have have a trade deficit going with China, a big one. No one, certainly not China can accuse us of being xenophobic, to arm them with oil, even on the level of UNOCAL is just crazy, to my way of thinking.

 

[NATO AIR]

We have have a trade deficit going with China, a big one. No one, certainly not China can accuse us of being xenophobic, to arm them with oil, even on the level of UNOCAL is just crazy, to my way of thinking.

We must disagree then.

I think there will be more occasions for the US to decide exclusion vs. inclusion. I figure the Chinese will examine this debacle and do their best to bid again on something else but while avoiding this dustup.

 

[Annie]

We must disagree then.

I think there will be more occasions for the US to decide exclusion vs. inclusion. I figure the Chinese will examine this debacle and do their best to bid again on something else but while avoiding this dustup.

Not oil or weapons to China. At the same time, why not spend their $$$ on the 'fledgling enterprises' rather than US companies? A question I had regarding Japan 20 years or so ago? If they had, they would probably be in better shape today.

 

[NATO AIR]

Not oil or weapons to China. At the same time, why not spend their $$$ on the 'fledgling enterprises' rather than US companies? A question I had regarding Japan 20 years or so ago? If they had, they would probably be in better shape today.

Perhaps they figure the US company was a safer investment.

 

[Annie]

Perhaps they figure the US company was a safer investment.

Or maybe something else? We ran with the Japanese tiger, which if their own banking practices hadn't imploded, may have caused us mucho trouble by now.

I'm not for turning away foreign investments here, we want them, but common sense must prevail.

 

[NATO AIR]

Or maybe something else? We ran with the Japanese tiger, which if their own banking practices hadn't imploded, may have caused us mucho trouble by now.

I'm not for turning away foreign investments here, we want them, but common sense must prevail.

Common sense to me is we let them buy this tiny company and then we aim to compete with China to buy some of their companies as well (i.e. though, the problem with China is too many of their companies are still state-owned or owned by shadowy military/intelligence figures)

I'm not a fan of China but we must :read: into the details here, and there was no devil in the details.

 

[Annie]

Common sense to me is we let them buy this tiny company and then we aim to compete with China to buy some of their companies as well (i.e. though, the problem with China is too many of their companies are still state-owned or owned by shadowy military/intelligence figures)

I'm not a fan of China but we must :read: into the details here, and there was no devil in the details.

Well I don't see US companies rushing all over to buy Chinese, whatever the reason. We too would be better off keeping our investments in the companies that others seem to want so badly-new concept for sure.

I am not a protectionist by inclination, but right now, do believe we should be looking very carefully at China's flexing its muscles, and do nothing to encourage their expansionist ideas.

 

[NATO AIR]

Well I don't see US companies rushing all over to buy Chinese, whatever the reason. We too would be better off keeping our investments in the companies that others seem to want so badly-new concept for sure.

I am not a protectionist by inclination, but right now, do believe we should be looking very carefully at China's flexing its muscles, and do nothing to encourage their expansionist ideas.

True.

Our growing relationship with India must continue at all costs. This is our best way to blunt the Chinese expansion, by forcing them to size up the competition next door.

 

[Annie]

True.

Our growing relationship with India must continue at all costs. This is our best way to blunt the Chinese expansion, by forcing them to size up the competition next door.

Now that I do agree with. I have no doubt that to go 'easy' on China right now would be a mistake, they already believe we are too preoccupied with Iraq, Iran, and Afghanistan. They are expanding their military way too quickly and all the tech given away has been coming home to roost.

 

[NATO AIR]

Now that I do agree with. I have no doubt that to go 'easy' on China right now would be a mistake, they already believe we are too preoccupied with Iraq, Iran, and Afghanistan. They are expanding their military way too quickly and all the tech given away has been coming home to roost.

Agreed. We have another great game afoot, except this one encompasses the entire world. We must expand our diplomatic corps, boost our private enterprise and recalibrate the other half of our intelligence services that aren't exclusively focused on terrorism. We must compete and overcome Chinese influence in places as diverse as Brazil, South Korea and Lebanon.

 

[Annie]

Agreed. We have another great game afoot, except this one encompasses the entire world. We must expand our diplomatic corps, boost our private enterprise and recalibrate the other half of our intelligence services that aren't exclusively focused on terrorism. We must compete and overcome Chinese influence in places as diverse as Brazil, South Korea and Lebanon.

and Iran.

One really needs to be careful not to mix up 'making allies' and 'ignoring who one's friends and enemies are...' China has been playing a whole different game for the past 30 years, now they are beginning to up the ante. We underestimated them too long...

 

[NATO AIR]

and Iran.

One really needs to be careful not to mix up 'making allies' and 'ignoring who one's friends and enemies are...' China has been playing a whole different game for the past 30 years, now they are beginning to up the ante. We underestimated them too long...

Yep.