And who thought this was a good idea?

The Alpha Environmentalist, knowing of my interest in China issues, just alerted me to this op- ed piece from the Arizona Daily Star on the Chinese government’s bid to buy the California based oil company Unocal (don’t know how long the link will be up).

Exactly who– other than, say, the Peoples’ Liberation Army– thinks this is a good idea? Assuming the most benign motives possible, it will doubtless divert oil from us in the future. As the Star states:”…..if the point of this purchase is to increase China’s oil sources, it seems only a matter of time before pressures would build to divert U.S. supplies to China’s domestic use”.

But, worse, what will happen if, down the road, China chooses to confront us over Taiwan, or… well, I can hadly begin to list the possibilities. To quote the Star– quite a liberal paper by the way– again: “There is a contradiction between the communist repression we don’t see and the economic surge we do. It is easy for us to forget that the People’s Republic of China is a repressive, totalitarian government.”

We don’t have time today to go into the Chinese record on the environment (air quality, the Yangtze Dam, animals in traditional medicine, and more). But over the next weeks I will be writing a lot more on China– on John Derbyshire’s novel trilogy, on Mark Elvin’s Retreat of the Elephants (China environmental history) and more.

Oh and– China also wants to acquire IBM’s computer division. Makes me glad I drive a Mac.

Didn’t Lenin say that the last capitalist would sell his executioner the rope with which to hang him?

UPDATE 6 July:
Both conservatives (National Review Online) and liberals (The New Yorker) have now defended the Unocal sale, mostly on the grounds of free trade and the nature of the oill market. The New Yorker adds for the record that we should NOT sell off defense companies like Lockheed Martin. They make some rational points, but I keep seeing that rope…

1 thought on “And who thought this was a good idea?”

  1. Hi–below is a letter to the Albuquerque Journal I wrote back in 2005 after doing some research. It just seemed to me that there was more to this proposed deal than oil. Interesting to read that now we are looking at rare earth defense reserves, USGS published a paper earlier this year warning of impact on current lifestyles if supply of certain rare earths is interrupted, and China is doing interesting things regarding trade of these resources.

    Saturday, July 16, 2005

    Letter to the Editor


    Unocal Sale Runs Deeper Than Oil Reserves
    THANK YOU to Patricia Madrid and the other attorneys general who have voiced concerns over how the purchase of Unocal by China's CNOOC will affect the Questa, N.M., operations of Molycorp, a subsidiary.
    Another facet that warrants consideration is the impact on Molycorp's rare earth mining operations in California.
    Currently, China's mines produce over half the world supply of rare earth elements (65 percent), with the United States (Molycorp) being second (24 percent).
    If the Chinese purchase of Unocal goes through and includes Molycorp, then it appears China will have control of nearly 90 percent of the rare earth supplies in the world.
    The uses of rare earth elements include fuel catalysts for vehicles and aircraft and alloys for fuel cells and batteries (lanthanum), pollution controls for autos and oil refineries and specialized ceramics for the space shuttle (cerium), and the production of microwave communication devices for the defense and satellite industries (yttrium).
    Perhaps this is of little concern, but it seems that it could put us at a disadvantage both economically and defensively. I hope someone with more knowledge than I will take a closer look at the potential problems.


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