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"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."|
Those words, the latest rhetorical volley in an escalating trade battle, officially elevated the takeover battle for Unocal into a bilateral issue involving Washington and Beijing, raising the stakes of the outcome.
CNOOC's bid comes as China's emerging force in the global economy continues to sow international tensions over competition for natural resources, impacts to the environment, trade balances and security relationships. The deal would be the latest in a string of Chinese purchases of foreign companies as Beijing encourages domestic firms to seek new markets abroad and secure raw materials for China's aggressive industrialization. The Chinese government has urged energy companies in particular to buy foreign oil fields as China's consumption soars, deepening worries about the country's access to supplies.
Already, CNOOC's bid has taken China across a new threshold: It has unleashed the first takeover battle between a Chinese company and a U.S. firm, the oil giant Chevron Corp., which has its own deal in hand to buy Unocal for $16.5 billion. If completed, CNOOC's purchase -- its bid is for $18.5 billion -- would stand as the largest foreign takeover ever made by a Chinese firm.
But as the price of oil continues to soar, underscoring the finite supply of global stocks, some members of Congress have taken to portraying China's appetite for energy as a threat to U.S. interests. They are painting CNOOC's effort to capture Unocal as an attempt to siphon off energy that would otherwise land in the United States, a proposition that analysts call dubious because most of Unocal's outstanding contracts supply customers in Asia.