[CS-FSLUG] NI Lou Dobbs on Chinese efforts to take over Unocal

[Fred A. Miller]

http://transcripts.cnn.com/TRANSCRIPTS/0506/30/ldt.01.html

DOBBS: China has launched an unprecedented public relations campaign in this
country, trying to win support for its unprecedented takeover bid for one of 
our largest energy companies. Chinese officials want you to believe that this 
is a simple commercial enterprise that would be buying Unocal, not a 
derivative directly of the Chinese government.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): The Chinese tell Washington,
don't stand in the way of our quest to buy your oil company. China's foreign
ministry spokesman: "This is a normal commercial activity. The relevant people
should not make a fuss over this."

Another Chinese official at an oil conference in New Orleans: "The Chinese
government will not pay a penny for this project. The government has made it
clear this is totally a business activity of the company."

Wrong. China National Offshore Oil Corp is 70 percent owned by the government.
And analysts say the Chinese government is providing $13 billion for the
purchase.

PATRICK MULLOY, U.S.-CHINA SEC. REVIEW COMMISSION: They're operating off
finances being provided by the government. And for them to claim this is a
purely commercial transaction I think is -- is not correct. Secondly, I wonder
if an American oil company could buy CNOOC.

ROMANS: No need to wonder. The Chinese will not allow foreign majority
ownership, let alone outright ownership of its energy and commodities assets.

ChevronTexaco has its own deal to buy Unocal. Chevron says China's bid for
Unocal is anything but a bona fide commercial activity. At least $10 a share
comes from low or interest-free loans from the communist government. Without
these subsidies, the company would not be able to make a ecompetive bid.

So then how does China define a normal commercial activity anyway? It
manipulates its currency to give its exports a 33 percent price advantage. It
has strict capital controls.

Make money in China, and you'll have a tough time pulling your money out. To 
say nothing of rampant Chinese pirating of American intellectual property, 
and using American-made technology to censor what its citizens learn and read 
over the Internet. For all these reasons, doing business with the communist 
government of China is anything but a normal commercial activity.

MULLOY: This country better get its act together and understand that other
countries have national strategies to compete in the global economy and we 
have none.

(END VIDEOTAPE) ROMANS: And not only is there no strategy here, the U.S.
government has not directly responded to these Chinese overtures to buy what
many say is an important energy asset -- Lou.

DOBBS: It is remarkable that this administration, this government has failed 
to directly respond to what is a bald -- bold attempt by the Chinese 
government to buy technology, rare minerals and rare earth, proprietary 
assets of this company. And this administration doesn't want to respond.

At least you refer to intellectual property theft, which is rampant in China.
The attorney general addressed that today and did so in rather aggressive 
terms.

ROMANS: He did. He talked about an international campaign to eradicate
intellectual property incursions. But Lou, he mentioned an awful lot of
countries, Portugal, Denmark, all kinds of law enforcement cooperating. Not a
word about China. And, of course, by all accounts, China is the number one
violator of intellectual property rights.

DOBBS: I'm shocked that this administration didn't mention China. Strange 
beyond belief. Christine Romans, thank you for that excellent report.

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