U.S.-China relations in the wake of CNOOC

About this book

"Congress set a dangerous precedent when itinterfered with Hong Kong--based CNOOC, Ltd.'s bid for Unocal. Supporters of the interventionargued that CNOOC, a subsidiary of state-owned China National Offshore Oil Company, couldpose a threat to U.S. economic and national security.Yet Unocal was only a small player in the U.S.energy market and had no technology that might pose a real threat to U.S. security. Nonetheless,congressional pressures prompted CNOOC towithdraw its $18.5 billion bid, paving the way for Chevron to acquire Unocal for $17.7 billion.The increasingly confrontational approach Congress is taking toward China is leading to "creepingprotectionism," often in the guise of protecting U.S. national security. Although it is proper to criticize China for its human rights violations and its lackof a transparent legal system, we should not ignorethe substantial progress China has made since it embarked on economic liberalization in 1978.A policy of engagement--or what Hu Jintao,president of the People's Republic of China, calls "peaceful development"--is a necessary condition for constructive U.S.-China relations. AlthoughChina's competitiveness does pose a threat to certain U.S. economic interests, it also benefits American consumers and exporters. Protectionism would harm both the United States and China and would increase the likelihood of conflict. Hardliners would gain at the expense of more reasonable voices.To avert the risk of conflict, the United Statesn eeds to treat China as a normal great power, notas an adversary; ensure that only those commercial transactions that genuinely threaten nationalsecurity are blocked; and recognize that byincreasing economic freedom we increase personalfreedom. Our economic security, as well as China's, will depend on sound free-market policies, not on destructive protectionism"--Cato Institute web site.