And so it starts..........

From the New York Times

June 23, 2005

Chinese Oil Giant in Takeover Bid for U.S. Corporation

By DAVID BARBOZA
and ANDREW ROSS SORKIN

SHANGHAI, Thursday, June 23 - One of China's largest state-controlled oil companies made a $18.5 billion unsolicited bid Thursday for Unocal, signaling the first big takeover battle by a Chinese company for an American corporation.

This is a disturbing but not unexpected development. The world's competition for oil will only make such occurrences more common, as the developing industrial giant seeks to consume more and more fossil fuels.

It should also come as no surprise that China is seeking to expand its global muscle by becoming a distributor as well as "the world's largest factory floor" .

This week, a consortium of investors led by the Haier Group, one of China's biggest companies, moved to acquire the Maytag Corporation, the American appliance maker, for about $1.3 billion, surpassing a bid from a group of American investors.

Last month, Lenovo, China's largest computer maker, completed its $1.75 billion deal for I.B.M.'s personal computer business, creating the world's third-largest computer maker after Dell and Hewlett-Packard.

California Republicans Duncan Hunter and Richard Pombo beseeched President Bush to inervene:

"As the world energy landscape shifts, we believe that it is critical to understand the implications for American interests and most especially, the threat posed by China's governmental pursuit of world energy resources. The United States increasingly needs to view meeting its energy requirements within the context of our foreign policy, national security and economic security agenda."

So why does China want Unocal, lets just say it a local issue:

Twenty-seven percent of Unocal's proven oil reserves and 73 percent of its proven natural gas reserves are in Asia, according to Merrill Lynch.

Here comes the carrot:

Trying to assuage concerns of some in Washington, CNOOC pledged to continue Unocal's practice of selling all of the oil and gas produced in the United States back to customers in the United States. The company also said it would retain substantially all of Unocal's employees in the United States.

Like I have said, expect to see more of this in the future. Even if this deal does not go through China will try again. They need to secure oil and natural gas reserves to fuel there economy. They cannot use unilateral military action like the US did in Afghanistan and Iraq, at least not yet. So, they will have to do it buy unleashing the money invested in them from around the world.

It would be ironic if the folks at the neo-fascist think tank New American Century,
tying us down in quagmires like Afghanistan and Iraq have helped innaugerate the Chinese century.