China and Unocal

Bill Roggio has an interesting discussion going over at the Fourth Rail regarding the Chinese government owned China National Offshore Oil Corporation, CNOOC, tender offer for Unocal, an American oil company based in California. Capitalism works best when there is a level playing field, but to me the playing field looks biased in favor of the company being bankrolled by its government, particularly when you take into account America's reliance on foreign oil and China's threatening posture towards Taiwan, not to mention China's continuing refusal to do squat about North Korean nukes while propping up its bankrupt government.

Here are some questions to consider (via Roggio):

1. What national security interests are at stake?

2. Is the cause of freedom expanded or diminished if the sale goes forward?

3. Is it fair for a state owned company of a Communist country to purchase a US company that trades in oil?

4. If the US denies the sale, what will China's response be towards free markets and capitalism?

5. What are the possible consequences for US-Sino relations if the bid is rejected/accepted?

6. What are the implications for Unocal shareholders who would like the best price for their shares?

I put in my two cents here.