The smartest people on earth derive from a comparatively small region which includes Korea, Japan and the coast-line region of northern China. This was at the end of the longest spur of mankind's coast-line migration out of Africa starting about 100,000 years ago in which the leading edge had to be clever enough to meet changing, and increasingly severe, environmental conditions until it finally met the edge of the receding ice-cap in the above region at about 20,000 years ago. They had become the smartest group -- and had (and still have) larger brain sizes than Europeans or Africans.
It is no wonder, therefore, that Japanese and South Korean businesses have been buying into America's economy for many years. More recently, since Deng Xiaoping's revolution of 20 years ago, the Chinese have been doing so. Many thousands of Americans are employed by Chinese industries in America just as many hundreds of thousands of Americans are already employed by Japanese and Korean businesses in America.
For some months, the Chinese state-owned oil company, China National Offshore Oil Corporation ( CNOOC), has been making a play for Unocal, an American oil company with several production centres in Asia. (Indeed, wearing another hat of mine, I sell choral music to a Unocal choir in an Indonesian oilfield.) Unocal is relatively small compared with Texaco or BP but the bid is the largest yet by a Chinese corporation.
Whether the bid succeeds or not, this puts President Bush into an acute dilemma. He will be assailed by nationalistic politicians, particularly some Republican Senators, but he will be aware that the American government deficit is now being supported by the US Treasury Bonds bought by China (and Japan and Korea) over the past ten years or so. Besides which, almost all large American corporations now have vast investments in China. (American productivity figures, relatively high compared with those of Western Europe are, in my view, largely subsidised by the productivity of American corporations in China.)
If sufficient numbers of Unocal shareholders agree to CNOOC's bid I don't think Bush can do otherwise than to allow it to proceed. After all, with the bulk of American workers working longer hours but becoming less prosperous than they were since about 1985, then Bush has far bigger problems on his plate if the Republicans are going to retain their majority in the mid-term elections next year.
Keith Hudson
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CHINESE OIL GIANT IN TAKEOVER BID FOR US CORPORATION
David Barboza and Andrew Ross Sorkin
Shanghai -- One of China's largest state-controlled oil companies made a $18.5 billion unsolicited bid Thursday for Unocal, signaling the first big takeover battle by a Chinese company for an American corporation.
The bold bid, by the China National Offshore Oil Corporation ( CNOOC), may be a watershed in Chinese corporate behavior, and it demonstrates the increasing influence on Asia of Wall Street's bare-knuckled takeover tactics.
The offer is also the latest symbol of China's growing economic power and of the soaring ambitions of its corporate giants, particularly when it comes to the energy resources it needs desperately to continue feeding its rapid growth.
CNOOC's bid, which comes two months after Unocal agreed to be sold to Chevron, the American energy giant, for $16.4 billion, is expected to incite a potentially costly bidding war over the California-based Unocal, a large independent oil company. CNOOC said its offer represents a premium of about $1.5 billion over the value of Unocal's deal with Chevron after a $500 million breakup fee.
Moreover, the effort is likely to provoke a fierce debate in Washington about the nation's trade policies with China and the role of the two governments in the growing trend of deal making between companies in the countries.
This week, a consortium of investors led by the Haier Group, one of China's biggest companies, moved to acquire the Maytag Corporation, the American appliance maker, for about $1.3 billion, surpassing a bid from a group of American investors.
Last month, Lenovo, China's largest computer maker, completed its $1.75 billion deal for I.B.M.'s personal computer business, creating the world's third-largest computer maker after Dell and Hewlett-Packard.
After years of attracting billions in foreign investment and virtually turning itself into the world's largest factory floor, China appears to be nurturing the growth of its own corporate giants into beacons of capitalism. China wants to be a player on the world stage, and it is eager to have its own energy resources, its own multinational corporations and its own dazzling corporate names.
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New York Times -- 23 June 2005
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Keith Hudson, Bath, England, <www.evolutionary-economics.org>
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