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|China: growing economic powerhouse; economic updates, discussion|
|Topic Started: Jul 17 2005, 07:10 AM (3,049 Views)|
|possible||Jul 17 2005, 07:10 AM Post #1|
CNOOC buy of Unocal would pose risk to US Asian interests - armed services panel
WASHINGTON (AFX) - If China National Offshore Oil Corp (CNOOC) were successful in its bid for Unocal Corp, it would threaten US interests in southeast and central Asia, said Duncan Hunter, chairman of the House Armed Services Committee.
In a hearing by the committee, Hunter said: 'Although it is a relatively small player in the United States energy market, Unocal is a significant provider of natural gas in Southeast Asia.'
He added that the Unocal's pipelines also run though several Central Asian republics friendly with the US.
'China's purchase of Unocal would dramatically increase its leverage over these countries, and therefore its leverage over US interests in those regions,' Hunter warned.
Witnesses mostly agreed.
'One has to ask, why is the Chinese government willing to spend so much money to buy this company?' said Richard D'Amato, chairman of the US-China Economic and Security Review Commission.
'If it affects the national security of the United States, intervention by the US government must be seriously considered,' he said.
James Woolsey, former US CIA director, was even blunter: 'Oil can be used as a tool of war,' he told the panel, and dismissed the view held by some that the regime will become less hard-line as its economic interests become more intertwined with those of the rest of the world.
The lone dissenting voice, Jerry Taylor of the free-market CATO Institute think tank, said that the risk posed by China is overplayed, and cautioned against alarm.
'The more China invests here, the less likely that we will be running into conflict,' said Taylor, director of natural resource studies at Cato.
'America has enough enemies abroad without conjuring new ones out of thin air.'
War. What is it good for?--James Brown
What's love got to do with it?--Tina Turner
Only the intelligent are brave.
|possible||Jul 17 2005, 07:19 AM Post #2|
CNOOC – Unocal: A Strategic Perspective for Southeast Asia
China's acquisition of Unocal might be more than a bid for more oil to feed Chinese economic growth. The purchase might be a strategic ploy by the Chinese government to become the leading supplier of natural gas to several key economies in Southeast Asia, and to use the natural resources in the area as leverage in its quest for expansion and power projection.
The view of many in Congress of the CNOOC bid for Unocal is that China is planning on taking over the United States energy industry and that the buyout of Unocal would be a threat to the national security of the United States. But the possibilities are much more complex and complicated than that.
The Wall Street Journal notes the following: "such a deal probably would do little to resolve China's most pressing energy needs -- and even less to disrupt the flow of oil to other markets. Much of Unocal's Asian production is tied up in contracts with Thailand and other nations. That means it is highly unlikely those supplies could be diverted to China for years, if ever. In other cases, China would wind up buying assets whose production it would have bought anyway, even if those assets were owned by rival Unocal bidder Chevron Corp., analysts and industry executives in the region say."
More interesting is the notion that China is not making a very smart play based on its needs for oil, since Unocal "isn't a major player when it comes to crude oil, the one commodity China is especially keen to buy. Instead, Unocal's Asian assets are weighted heavily toward natural gas, an important and hard-to-transport energy source that is relatively plentiful in the region."
According to the Journal "Cnooc says it has no intention of disobeying market demand, and analysts say the company may be just as likely as Chevron or Unocal to sell oil and gas to countries other than China. The bid for Unocal has ["little to do with security of supply for China,"] says Derek Butter, an analyst at energy consultancy Wood Mackenzie in Edinburgh, Scotland. Instead, he says, it has more to do with China's desire to create a large corporation that ["can compete with the other international companies, and has the skills in the future to negotiate its way into large projects."]"
The bottom line, according to this alternative point of view is that China's bid for Unocal is a bid toward becoming a major oil producer with a global presence, rather than to add to China's reserves for its own personal use.
What makes no sense is why China would want to become a competitor to Exxon instead of improving its own domestic situation through the addition of geographically sensible reserves.
The only conclusions are that China doesn't really know what it's getting into, that it's getting bad advice from Goldman Sachs and the rest of its American advisors on the Unocal deal, or that there is something deeper involved in its quest for Unocal. In our opinion, the latter is the more likely case.
Here are three interesting facts put forth by the Journal:
1. "In the case of Thailand, all of Unocal's gas production is committed to a single Thai buyer. The gas is committed through long-term sales agreements that have expiration dates ranging from 2010 to 2029. Even if those contracts weren't in place, it would be difficult and costly for China to send the gas elsewhere because the pipelines or other infrastructure to do so don't exist. Building such infrastructure likely would require the consent of the Thai government, which relies on Unocal's gas to fuel its booming power sector."
2. "The idea that China might build a gas terminal to ship liquefied Thai gas to China ["is absolutely preposterous,"] says John Vautrain, a vice president and director in Singapore of Purvin & Gertz, a Houston oil and gas consultancy. ["The Thais wouldn't let you."]
3. "Unocal's Myanmar output also is sold to Thailand. Its Bangladesh gas generally is reserved for Bangladeshi consumption. The picture is somewhat different in Indonesia, where Unocal holds interests in a number of promising fields whose output probably would be earmarked by Cnooc for the China market, according to people familiar with the company's strategy."
In our opinion, the Journal, while clearly listing some interesting observations is missing an important point.
China's purchase of Unocal, even if it did not lead to the diversion of natural gas toward its own borders, would give it control of the energy supply used by Thailand, Myanmar, Bangladesh, and Indonesia. It would also put some pressure on Japan and South Korea.
In other words, in one fell swoop, China would become the energy czar for a significant portion of South East Asia, and would gain valuable leverage with which to further its other goals, the expansion of its influence, and the ability to project its power. A scenario in which China could use its leverage to gain concessions from the four countries mentioned, including the placement of military bases, fueling stations for submarines and merchant ships, and the placement of surveillance equipment and communication relay stations in all of those countries is an easy next step to visualize.
All the while, China could also make money by continuing to sell energy to those countries by honoring existing contracts, while negotiating more lucrative ones in the future.
Indeed, the Unocal purchase can easily be looked upon as a threat to national security, especially if you live in Thailand, Myanmar, Bangladesh, Indonesia, Japan, or anywhere else in Asia.
War. What is it good for?--James Brown
What's love got to do with it?--Tina Turner
Only the intelligent are brave.
|spraret||Jul 18 2005, 03:58 PM Post #3|
PDFF Admin Support
|Its just a business deal and a tactical move to mitigate PROC's power crisis brought about by its rapid economic growth.|
|MSantor||Dec 24 2007, 12:09 AM Post #4|
Here are further reasons why no one must ignore the Dragon that is gaining strength to the North of the RP; the PRC's prosperous economy may hold another key to the continued econ. development of the RP.
Here's another article I don't necessarily agree with or believe.
|MSantor||Apr 3 2009, 01:46 AM Post #5|
If it ends being the Ren Min Bi(ÈËÃñ±Ò)/Yuan (Ôª) used in mainland China, however, I will eat my shirt.
|saver111||Jun 3 2009, 12:03 PM Post #6|
They will no longer be called, copycats as
GM to sell Hummer to Chinese company
By TOM KRISHER and BREE FOWLER, AP Auto Writers Tom Krisher And Bree Fowler, Ap Auto Writers – Tue Jun 2, 6:30 pm ET
Hummer vehicles sit on the sales lot of a Niles, Mich. dealership Thursday May 14, 2009. As part of the GM reorganization the future of the H2 Hummer vehicle is uncertain. The H2 is produced at the AM General plant in Mishawaka, Ind. 10 miles south of this dealership. (AP Photo/Joe Raymond)
DETROIT – General Motors Corp. took a key step toward its downsizing on Tuesday, striking a tentative deal to sell its Hummer brand to a Chinese manufacturer, while also revealing that it has potential buyers for its Saturn and Saab brands.
China's Sichuan Tengzhong Heavy Industrial Machinery Co. said Tuesday afternoon that it reached an agreement to acquire the brand from GM for an undisclosed ammount. The Detroit automaker had announced Tuesday morning that it had a memorandum of understanding to sell the brand of rugged SUVs, but it didn't identify the buyer.
Sichuan Tengzhong deals in road construction, plastics, resins and other industrial products, but Hummer would be its first step into the automotive business.
GM said the sale will likely save more than 3,000 U.S. jobs in manufacturing, engineering and at various Hummer dealerships. Tengzhong said it will assume GM's existing agreements with Hummer dealers.
"We will be investing in the Hummer brand and its research and development capabilities, which will allow Hummer to better meet demand for new products such as more fuel-efficient vehicles in the U.S," Chief Executive Yang Yi said in a statement.
As part of the proposed transaction, Hummer will continue to contract vehicle manufacturing and business services from GM during a transitional period. For example, GM's Shreveport, La., assembly plant would continue to contract to assemble the H3 and H3T through at least 2010, GM said. AM General LLC in Mishawaka, Ind., makes the larger H2 under contract for GM.
Hummer will keep its existing management team and remain based in the United States, the companies said. Tengzhong said it expects to expand the brand's dealer network worldwide, including to China.
"GM is close to a sale of its Hummer brand, which is good news for the 3,000 Americans who will be able to keep their jobs, the two American plants that will remain open and the more than 100 Hummer dealers that should be able to stay in business all around the country," White House spokesman Bill Burton said earlier in the day.
On Monday, the Shreveport plant, which has about 800 workers, escaped being among 12 plants that GM said would be shut down by next year. The plant, which employed 3,000 several years ago, also produces Chevrolet and GMC pickups.
Johnny Bell, 59, who has worked at GM for 28 years, said many workers are still concerned about the plant's long-term future.
"Good news is good news, but we want all the news," he said. "We're concerned about what happens after 2010."
Morgan Johnson, head of the United Auto Workers local at the plant, said GM indicated to the union that pickup assembly would continue in Shreveport through 2012.
"We're just happy that the doors are still open considering all the plant closings," said Sharon Brock, 52, who has worked at the sprawling plant for 26 years.
GM also said Tuesday that it has 16 buyers interested in purchasing its Saturn brand, while three parties are interested in the Swedish Saab brand.
Chief Financial Officer Ray Young told reporters and industry analysts on a conference call that GM is continuing to pursue manufacturing agreements with a new Saturn buyer.
GM would like to sell the money-losing Saturn brand's dealership network, contracting with the new buyer to make some of its cars while the buyer gets other vehicles from different manufacturers.
At the same time, bridge loan discussions with the Swedish government are progressing, Young said.
GM, which filed for Chapter 11 bankruptcy protection in New York on Monday, is racing to remake itself as a smaller, leaner automaker. In addition to its plan to sell the Hummer, Saab and Saturn brands, GM will also phase out its Pontiac brand, concentrating on its Chevrolet, Cadillac, Buick and GMC nameplates.
The company hopes to follow the lead of fellow U.S. automaker Chrysler LLC by transforming its most profitable assets into a new company in just 30 days and emerging from bankruptcy protection soon after.
But GM is much larger and complex than its Auburn Hills-based rival and isn't up against Chrysler's tight June 15 deadline to close its deal with Fiat Group SpA.
Sharon Lindstrom, managing director at business consulting firm Protiviti, said the companies pose different challenges. But as with Chrysler, she notes that the Treasury Department made sure many of GM's moving parts were in order ahead of time so a quick bankruptcy reorganization might be possible.
"They had a lot of their ducks in a row because the terms of the government financing forced them to get all the parties to the table in a very, very short period of time," Lindstrom said.
Separately, the German government said Tuesday it paid out the first euro300 million ($425 million) in bridge loans to GM's Adam Opel GmbH division. The loans are part of a deal to shrink GM's stake in Opel and shield it from GM's bankruptcy protection filing in the U.S.
Canadian auto supplier Magna International Inc. and Russian-owned Sberbank will acquire 55 percent of Opel.
A sale of the Hummer brand had been expected. Chief Executive Fritz Henderson had said in April that the automaker was expecting final bids from three potential buyers within the month.
Eric Lane, vice president of Baton Rouge, La.-based Gerry Lane Enterprises, which has four dealerships — including one offering Hummers — welcomed the sale.
Lane said a lack of new products and the recession figured into the Hummer equation much more than last year's runup in gasoline prices. "I haven't had a single owner complain about mileage. Nobody buys a Hummer because of the gas. You don't buy a vehicle for $60,000 and worry about the price of gas."
Critics had seized on the rugged but fuel-inefficient Hummer as a symbol of excess as GM's financial troubles grew and gas prices rose. Sales at Hummer, which is known for models with military-vehicle roots, have been in a steep slide since gasoline prices rose to record heights last summer. For the first five months of this year, Hummer sales are down 64 percent.
GM nailed down deals with its union and a majority of its bondholders and arranged the Opel deal in order to appear in court Monday with a near-complete plan to quickly emerge with a chance to become profitable.
The government has said it expects GM to come out of bankruptcy protection within 60 to 90 days. By comparison, the judge overseeing Chrysler's case approved the sale of its assets to a group led by Italy's Fiat in just over a month. Some industry observers think Chrysler could emerge as early as this week.
During Monday's hearing, GM attorney Harvey Miller stressed the magnitude of the case and the importance of moving GM through court oversight as fast as possible. He noted that the automaker only has about $2 billion in cash left.
"If there's going to be a recovery of value, it's absolutely crucial that a sale take place as soon as possible," Miller said in his opening statement.
The automaker wants to sell the bulk of its assets to a new company in which the U.S. government will take a 60 percent ownership stake. The Canadian government would take 12.5 percent of the "New GM," with the United Auto Workers union getting 17.5 percent and unsecured bondholders receiving 10 percent. Existing shareholders are expected to be wiped out.
U.S. Judge Robert Gerber moved swiftly through more than 25 mostly procedural motions during the automaker's first-day Chapter 11 hearing.
Gerber set GM's sale hearing for June 30, putting it on a path similar to that of Chrysler. Objections are due on June 19, with any competing bids required to be submitted by June 22.
Gerber also gave GM immediate access to $15 billion in government financing to get it through the next few weeks, and interim approval for use of a total $33.3 billion in financing, with final approval slated to be ruled on June 25. The funds are contingent on GM's sale being approved by July 10. Gerber also approved motions allowing the company to pay certain prebankruptcy wages, along with supplier and shipping costs.
The sheer size of GM makes it a more complicated case than Chrysler.
GM made twice as many vehicles as Chrysler's 1.5 million last year and employs 235,000 people compared with Chrysler's 54,000. GM also has plants and operations in many more countries, meaning it will likely have to strike separate deals to navigate the bankruptcy laws of those places.
Henderson said GM has learned a few things by watching Chrysler's case.
"Certainly the court showed that it can address 363 (sale) transactions in an expeditious fashion," Henderson said at a news conference Monday. "Particularly in our case with what will be a very large 363 transaction."
GM's filing for Chapter 11 bankruptcy protection is the largest ever for an industrial company. GM, which said it has $172.81 billion in debt and $82.29 billion in assets, had received about $20 billion in low-interest loans before entering bankruptcy protection.
China saving the U.S... The Mighty Hummer, symbol of American power.
Justice for Daniel Lorenz Jacinto
HELP END PIRACY NOW!:
|saver111||Jun 9 2009, 09:24 PM Post #7|
Official: Purchase of Hummer against China's development trend
www.chinaview.cn 2009-06-09 18:39:17
HANGZHOU, June 9 (Xinhua) -- A domestic company's purchase of the gas-guzzling Hummer brand is against China's economic situation and the country's development, said an official with the Development Research Center of the State Council, the country's Cabinet Tuesday.
"If the Chinese company is just trying to stir media hype, that is understandable; if it really takes this step to buy, relevant departments should be strict and cautious with the approval, or reject the application if necessary," said vice director Lu Zhongyuan, at the China Opening-up Forum in Ningbo of eastern China's Zhejiang Province.
Tengzhong Heavy Industrial Machinery Co., which is based in southwestern Sichuan Province, said last Wednesday that it was buying Hummer and a preliminary deal had been inked.
"Buying a fuel-hungry and high-emission brand is directly against the current trend of energy saving and emission reduction," Lu said.
"The entire society should form the concept of energy-saving and environmental protection, no matter producers, investors, or consumers," he added.
The preliminary deal for a little-known Chinese company to buy Hummer from General Motors has triggered doubts and criticism from analysts.
Tengzhong has no experience in the passenger-vehicle market and mainly produces industrial machinery.
Editor: Xiong Tong
Justice for Daniel Lorenz Jacinto
HELP END PIRACY NOW!:
|MSantor||Aug 20 2009, 03:00 AM Post #8|
The stability and growth of China are interesting subject, especially when you realize you are not actually getting the numbers you need. The normalized GDP figures and the mouontain of non performing debt that the Chinese government is taking on seems very similar to the situation the United States was getting into starting in the 1990's:
|MSantor||Sep 14 2009, 11:35 PM Post #9|
And the PRC responds to a tire tariff imposed on them by the Obama administration:
|MSantor||Nov 17 2009, 11:47 PM Post #10|
A sobering update:
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