[FoRK] Sleeping With The Enemy...

Ian Andrew Bell FoRK fork
Mon Jun 27 14:20:53 PDT 2005


In the "you reap what you sow" category, China is buying fewer U.S.  
Bonds and has turned its attention to strategic acquisitions.  And  
despite what U.S. regulators may feel, they really are in a position  
to call the shots.

Deny their bid to buy Unocal and they might decide to stop buying  
those bonds altogether or (worse) sell them.
Allow the transaction to go through and you're pretty-much fucked for  
buying oil outside of OPEC if China ever stops supplying through  
Unocal, which specializing in harvesting oil in far-flung,  
politically "hot" countries.

Oops.

While the U.S. attempts to secure its future through the use of boots  
and hillbilly armour, China secures its future using (U.S.) Dollars.

-Ian.


----------

http://www.nytimes.com/2005/06/27/opinion/27krugman.html

June 27, 2005
The Chinese Challenge

By PAUL KRUGMAN
Fifteen years ago, when Japanese companies were busily buying up  
chunks of corporate America, I was one of those urging Americans not  
to panic. You might therefore expect me to offer similar soothing  
words now that the Chinese are doing the same thing. But the Chinese  
challenge - highlighted by the bids for Maytag and Unocal - looks a  
lot more serious than the Japanese challenge ever did.

[...]

Unocal sounds, in other words, like exactly the kind of company the  
Chinese government might want to control if it envisions a sort of  
"great game" in which major economic powers scramble for access to  
far-flung oil and natural gas reserves. (Buying a company is a lot  
cheaper, in lives and money, than invading an oil-producing country.)  
So the Unocal story gains extra resonance from the latest surge in  
oil prices.

If it were up to me, I'd block the Chinese bid for Unocal. But it  
would be a lot easier to take that position if the United States  
weren't so dependent on China right now, not just to buy our  
I.O.U.'s, but to help us deal with North Korea now that our military  
is bogged down in Iraq.



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