Chinese Company Ends Attempt to Buy Unocal–PRC, WSJ Whine in Unison
The griping over CNOOC’s withdrawal of its bid for Unocal is intense, first from the Peoples Republic, as would be expected (below is entire Wall Street Journal August 5 excerpt from China Daily):
China National Offshore Oil Corp. (CNOOC) has to bear the cost of its abandoned bid for the American oil company Unocal. But the fallout from the bid will not only affect the Chinese side. The idea of the United States as a self-appointed champion of the free market has become questionable. . . .
The unjustified U.S. opposition, largely politically motivated, will . . . poison the current prevailing mood as bilateral economic ties between China and the United States are enhanced. The high-profile takeover battle demonstrated to the world that the United States is not a free economy as it claimed to be. In the U.S. market, an asset for sale has not gone to the buyer that most prized it, because of regulatory concerns fuelled by bogus fears and hidden interests.
Apparently, Unocal shareholders chose to accept the cheaper offer free of regulatory risk. But the politicized regulatory matter has, in fact, deprived them of the chance to maximize value, as the market should allow.
. . . [T]he explicit message the takeover battle sends to the world is that American business is defined by political needs. . . . In the long run, the casualty will be on U.S. competitiveness if the market is to play second fiddle to protectionism with political patronage.
Oh boo hoo. But what surprised me a bit, but in retrospect really shouldn’t have, is the Wall Street Journal’s degree of objection. On illegal immigration, and now on national sovreignty, perhaps WSJ really is WSSJ, and stands for “Will Sell Souls Journal” (link requires subscription):
The mystery is why the Washington celebration over Cnooc’s stand-down. To be sure, China is a nation with inexcusably suppressed political freedom and way too much state intrusion in the economy. We too were troubled that Cnooc is quasi-state owned. But it is a good thing for Americans if the Chinese use their increasing economic clout and the dollars they accumulate from trade to bid up the value of U.S. assets.
And since there is one global price for oil, whether Unocal’s resources are owned by a Chinese or American firm has no bearing on the price Americans pay for gas. China, like the U.S., is a major importer of oil; Cnooc would have had every incentive to pump oil to keep it on the market.
A zero-sum neurosis has taken hold on Capitol Hill that the Chinese, with their double-digit rates of economic growth, are creating too much wealth and that all this wealth is coming at America’s expense. The real lesson of China’s economic miracle of the past decade is that capitalism works. The lesson of the failed Cnooc deal with Unocal is that there are still too many mercantilists in Washington.
Not so, guys. There are still enough people who remember that today’s rulers in China’s government, though they have developed a fondness for money, are still the “ideological” descendants of this guy.
Who hijacked the WSJ’s Cold War-era editorial board and replaced it with rope-sellers?
