China and Unocal

With the Senate keeping busy lately going on the news talk shows to slam President Bush's so-far-non-existent nominee for replacing Sandra Day O'Connor, I lost track of the House of Representatives. Did they still exist? Who could tell by the news coverage?

Apparently, unlike our Senators, our Representatives don't actually need the press's approval to keep them working. Not only did the House overwhelmingly (398 - 15) pass a resolution on June 30 asking the Bush administration to prevent China's energy company (CNOOC Ltd.) from buying American-owned Unocal, but their resolution really ticked off the Chinese government (full story here, by Peter S. Goodman of the Washington Post Foreign Service).

Good.

"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," the Foreign Ministry said in a written statement. "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."

Unfortunately, with China's communist political/governmental system, there's no such thing as "normal commercial activity between enterprises." CNOOC is intertwined with the communist government.

"We cannot, in my opinion, afford to have a major U.S. energy supplier controlled by the Communist Chinese," said Rep. William J. Jefferson, a Louisiana Democrat.

He's right. China will be looking to its own national interest, which does not happen to coincide with ours. And when that Chinese national interest involves keeping the oil produced by Unocal and preventing our access to it, you can bet your bottom dollar China will do just that--even if it violates contracts.

But whatever comes of the Unocal battle, tensions over Chinese investment are probably only beginning. Just as a rising Japan in the 1980s snapped up high-profile assets in the United States and provoked widespread American unease, China's expanding horizons are having a similar effect.

Moreover, key differences between Japan of that era and current-day China could make this go-round more combustible: Japan was a U.S. military ally and part of the same ideological bloc, whereas China is viewed by many in Washington as an adversary.

What I'm not seening in this Washington Post article is a more in-depth look at China's latest sabre-rattling. Saying, "China is viewed by many in Washington as an adversary," makes it look as though Washington is the bad guy for being so suspicious of harmless China.

But, as recently as June 20, 2005, China has deployed new weapons, this time a submarine-launched Ju Lang-2 missile, which "has better precision and guidance and is harder to detect." (See full story here)

What concerns me about Washington is not that "many" view China as an adversary, but that many more don't see them as an adversary. It's too much like the children's story, "The Gingerbread Man," (© 2002 - 2005 Topmarks Education) and China is the fox.

A sly fox came out from behind a tree. 'I can help you cross the river,' said the fox. 'Jump on to my tail and I will swim across.' 'You won't eat me, will you?' said the gingerbread man.'Of course not,' said the fox. 'I just want to help.'

The gingerbread man climbed on the fox's tail. Soon the gingerbread man began to get wet. 'Climb onto my back,' said the fox. So the gingerbread man did. As he swam the fox said, 'You are too heavy. I am tired. Jump onto my nose.' So the gingerbread man did as he was told.

No sooner had they reached the other side, than the fox tossed the gingerbread man up in the air. He opened his mouth and 'Snap!' that was the end of the gingerbread man.

This is how "many" in and out of Washington see China, and it's in the interest of our safety and national security to see them this way. Let's hope the White House also sees them this way and takes action to prevent the purchase of Unocal by any of China's "enterprises."