Unocal: A Must-Read

A few days ago, of Chinese investment in the U.S. economy, I said, "I feel a bit more confident that my position on Chinese investment in the American economy is probably correct...."

On a strictly economic level, this is true. So long as a foreign company has to obey U.S. law, who cares if it owns property here? Big deal if an American company gets purchased outright. Right? But what if its purchase of an American company could affect the ability of our government to protect us from the machinations of its mother country? And how could that occur?

If, as in the case of Unocal, the American company possesses assets of strategic interest to said foreign country. Go straight to Capitalism Magazine now and read about why the Unocal deal might ought to be prevented on the merit of national security concerns.

Let's take a closer look at Unocal's assets. Unocal has major holdings in Asia. By gaining control of its energy reserves in Thailand, Burma, Indonesia, Vietnam and Bangladesh, China would beef up its already considerable petroleum holdings in Southeast Asia -- holdings that readily translate into political clout. The acquisition would significantly help China achieve its goal of dominating the entire region.

Similarly, Unocal's operations in Azerbaijan would give Beijing just that much more influence in the Caspian and Central Asia.

And then there are Unocal assets far closer to American shores. The company operates 10 platforms in Alaska's Cook Inlet, the bay providing access to Anchorage -- and Elmendorf Air Force Base. At the mouth of Cook Inlet stands the Kodiak Island Launch Center. Both it and Elmendorf provide key support services to our new National Missile Defense facilities. There's not a member of the Chinese intelligence service who wouldn't salivate at the prospect of controlling these strategically located platforms.

As an extra bonus, Unocal boasts deep-sea exploration platforms in the Gulf of Mexico, just off the Litton-Ingalls submarine yards at Pascagoula, Miss., and the Navy facilities at Galveston, Texas.

The continued existence of a free economy depends on continued rule of law and protection of individual rights. This is why our government legitimately controls transfers of technology abroad that might have military value.

By the same principle, this deal should be prevented as a clear threat to our national sovereignty and our interests abroad.

It looks like Curtis Weeks was correct to complain that "Fu Chengyu, chairman and CEO of CNOOC Ltd. has responded to American fears about the acquisition of Unocal by his company...", but that he "doesn't seem to address strategic issues beyond the economic factors." Fortunately, the author of this article, John J. Tkacik, Jr., does so.

Wakeup call made.

-- CAV

Crossposted to the Egosphere