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American Public Hostile to Chinese Bid for Unocal

Concern over a bid by Chinese company CNOOC to purchase the U.S. oil company Unocal is taking hold among the American public as a new Wall Street Journal poll finds nearly three-quarters of the people surveyed oppose the CNOOC deal.

Chinese company CNOOC's offer to buy Unocal has been described in the U.S. House of Representatives as a threat to U.S. national security. House lawmakers have also approved another measure aimed at blocking the Bush administration from approving a CNOOC-Unocal deal.

This viewpoint was given popular support Thursday, with the publishing of a Wall Street Journal poll that found that 73 percent of more than 1,000 people polled, in its words, "dislike" the potential deal.

Speakers focused on this issue at a discussion in Washington hosted by the Carnegie Endowment for International Peace.

Carolyn Bartholomew is a member of the U.S.-China Economic and Security Review Commission, a body that advises Congress. Ms. Bartholomew accused the Chinese government of largely owning and controlling CNOOC. She added that, therefore, if CNOOC were to take over a U.S. oil company, this could have implications for U.S. national security.

"The purchase of Unocal was approved by the Chinese State Council, China's cabinet, and the governor of the State Central Bank helped to assemble the financing package," she noted. "The enterprise has direct and special access to the unlimited deep pockets of the Chinese government's reserves. Calling the transaction a free market activity is absurd and a distortion of the notion of free markets."

CNOOC is worth an estimated $22 billion. The Chinese company has made an $18.5 billion offer for Unocal, as opposed to a competing bid of $16.5 billion from U.S. company Chevron.

On the other side of the issue, Carnegie Endowment senior associate Albert Keidel said he thinks blocking the deal would actually compromise U.S. security.

"We need to engage China in a rules-based global system, as the bedrock for our national military security, going forward," said Mr. Keidel. "If we try to create a non-price based system for securing or guaranteeing energy sources or any other scare resource, we will be creating a climate that will force China into a similar posture. And that is dangerous, in a national military-security sense, to my child and her grandchildren."

Approval of any CNOOC deal will ultimately be made by the Committee on Foreign Investments in the United States (CFIUS), a multi-agency panel chaired by the U.S. Treasury.