Three NYTimes articles sum it up all.
Who's Afraid of China Inc.?
This article worries China could be the Walmart in World Business, but with an army !!
In China, there are also two camps - the security hawks and the economic modernists, according to China analysts. The modernists see China joining the United States as the second great economic power of the 21st century, and the two nations sharing the gains from increased trade ties and global growth. The hawks regard that view as naïve, and fret that American policy is to remain the world's only superpower and to curb China's rise. So China's response, the hawks say, is to try to erode United States hegemony and reduce America's power to hold China down.
Senator Byron Dorgan, a North Dakota Democrat, has drafted three pieces of anti-Cnooc legislation that range from calling for a six-month Congressional inquiry into the bid to a bill that would prohibit the deal. Mr. Dorgan objects to the Chinese move on fair-trade grounds. The Chinese government, he says, would not allow an American company to buy a Chinese oil company. "So why on earth should they be able to buy an American oil company?" Mr. Dorgan said.
Perhaps, but many economists and trade specialists contend that the American angst over the Cnooc bid says more about the United States than it does about China or Cnooc's tactics. "All this really points to the anxieties about globalization in our own society," said Clyde V. Prestowitz, a trade official in the Reagan administration and president of the Economic Strategy Institute in Washington. "We are so economically interdependent with China now and we chose that path."
"We handed China the money they are using to try to buy Unocal," said Mr. Prestowitz, author of a new book on the shift of wealth and power to Asia, "Three Billion New Capitalists" (Basic Books, 2005). "And now we're telling the Chinese, please keep investing in our bonds but you can't invest what amounts to a sliver of their surplus in an oil company. That's really confused and hypocritical on our part."
There's a New China Syndrome on Wall Street
This is getting interesting !Three big IBanks pitted against each other in the CNOOC bid.
Lehman Brothers (Chevron)
The most likely winner.And who knows? If Chevron wins, Lehman's defense of it could prove to be the best way to win favor in China. After all, the Chinese may just say, "If you can't beat 'em, join 'em."
Morgan Stanley (Unocal)
Morgan Stanley, which is also trying to create a franchise in China, is representing Unocal. Relying in part on Morgan Stanley's advice, Unocal's board has rejected Cnooc's bid - which is actually higher than Chrevron's offer - as too low, considering the political risks.
Goldman Sachs (CNOOC)
Goldman's decision to pursue working for Cnooc was a calculated one. It knew full well that Cnooc had a long shot of winning. As adviser to the losing side in the takeover fight, Goldman would make virtually no money for its months of strategizing and number-crunching all-nighters. But for Goldman, it may have looked like a no-lose situation. If Cnooc won, it would be a watershed deal that would reap millions of dollars in fees for Goldman. But being on the losing side would offer rewards, too. The experience itself has already helped Goldman build deep relationships inside the Chinese government that may give it a leg up in the coming years.
But the baseline : While China's executives and, more important, its government officials, must realize that bankers are mercenaries, it's also true that loyalty and long-term relationships matter.
In Takeover Dance, the Chinese Miss a Step
These stumbles might temporarily ease the political backlash in Washington over the perceived onslaught by China as it seeks to build global corporations. But that relief could be short-lived.
"This won't slow things down at all," said Jerry J. Kong, a lawyer at Grandall Legal Group, which is based in Beijing. "On the contrary, I think Chinese companies will be more aggressive."
Now the question is how far Cnooc will go to try to regain the initiative. So far, it has not indicated its next move, but the company still has some time and leeway to raise its offer. Both bidders are racing against an Aug. 10 deadline, when Unocal's shareholders will be asked to approve or reject Chevron's offer.
While the Unocal and Maytag contests may prove to be setbacks for two of China's star companies that are seeking to become global corporations, they and others are expected to return to the fray.
As Mr. Kong, the lawyer at Grandall, put it: "This will help these companies mature."
