Sooner or later, America’s debts to the rest of the world, including China, will have to repaid with something other than pieces of paper with pictures of dead presidents on them. That means either goods and services (requiring a sharp reduction in the domestic consumption of same) or hard assets, such as real estate, factories, mines — and oil companies.
Back to Main
July 5, 2005
WB: China Syndrome
Comments
ah china, the global majority. our leaders have hit a wall. one they will eventually have to accept and learn to climb over, grovel in front of , eventually accept. can’t find the link about unocal being one of the investors in that pipeline, but i’m sure that has a little something to do w/ the revulsion.perhaps they figured they’ld be long dead before having to pay the piper.
Posted by: annie | Jul 5 2005 20:03 utc | 1
ah china, the global majority. our leaders have hit a wall. one they will eventually have to accept and learn to climb over, grovel in front of , eventually accept. can’t find the link about unocal being one of the investors in that pipeline, but i’m sure that has a little something to do w/ the revulsion.perhaps they figured they’ld be long dead before having to pay the piper.
Posted by: annie | Jul 5 2005 20:06 utc | 2
Interesting that Billmon plays down this deal and calls out the xenophobists, and he is spot on with this post.
Wait until the Chinese go after GE and Boeing.
Posted by: Cloned Poster | Jul 5 2005 20:22 utc | 3
@CP – Wait until the Chinese go after GE and Boeing.
the real price:
Market cap of Exxon Mobile: 382.84B
Chines currency reserve growth is about 50 billion a quarter and rising. Two years from now, 400B later, …
Now that would be a national security issue – consider the consequences…
China will likely target oil companies which are a reserve-rich and customer-poor. I don’t think ExxonMobil falls into that category. The Chinese will want a firm which has extra reserves it can divert to its own markets. The major oil companies don’t have that type of luxury anymore. They’re mostly downstream marketing agents.
Posted by: PrahaPartizan | Jul 5 2005 21:21 utc | 5
i like cineses civilization, i like western european painting. islam that oppostion to euro-centro hegemony. time is up. the clash of civilizations.
our little boots is not a wise man. he based the hornets nest.
our champion is a loser, not formed, bead, acorn, not yet born.
so like, mr. bill, i sense a sadness this decline that little boots hastens.
islam is ready to explode and our ‘crusader leader’ is not a tactian. he alientate his cultural roots – europe. isolated and not trusted by his peasant walmart nation.
‘sands of empire’ robert w. merry. clash of civilzations. its okay mr. bill you see the twilght of empire. i guess karma and plagues on our scared ‘homeland’, actually i prefer buffalo to gringoes.
Posted by: humble pie | Jul 5 2005 21:58 utc | 6
I wish the Chinese would hurry up and get their act together and start effectively bribing American politicians. This current China bashing show’s they still have a long way to go.
If the Israeli’s can get their men running the Pentagon and few rich families can convince America that the “death tax” has to go it can’t be that much harder for China to buy a enough love to get a simple oil deal through.
I don’t care about the oil deal one way or the other, but a war between China and the US is the scariest thing I can imagine. Even though it is unlikely it does seem a bit of a pity that the Chinese have not yet bought a guarantee it will never happen for a few million dollar’s in campaign contributions, a bit of lobbyist smooching and snazzy bit of re-framing.
Hopefully, once they have bought a few more of Wall St’s crown jewel’s American business can show them how its really done.
Posted by: still working it out | Jul 5 2005 22:04 utc | 7
China will likely target oil companies which are a reserve-rich and customer-poor.
Yes, for now. UCL is largely a natural gas company with significant reserves in the Far East I believe. I had picked them out as an investment years ago. It never really went anywhere, then.
I think this is significant, and Billmon spells it out nicely.
But surely American ingenuity and productivity will triumph – I say bring ’em on! Oh, wait…
Posted by: correlator | Jul 5 2005 23:13 utc | 8
I’m sure that there are more than a few politicians that are playing the xenophobia card (at the same time, mysteriously downplaying the enormous share of our national debt that the Chinese government owns). However, CNOOC is a state-controlled company (around 75%). Therefore, I think that there is a valid security issue (national and/or economic) involved. Labelling the concern as purely xenophobic doesn’t quite resonate.
Posted by: cslewis | Jul 6 2005 3:09 utc | 9
Unocal gives the Chinese an American chit in the political game, and a big one. Unocal’s information on the real status of the oil industry will give Chinese planners a clear perspective on the range of future US Cheney energy planning commission actions. They may even be able to attend those meetings directly. Much of the value of oil globally is based on perception management, ie how much people believe we have, and how much people believe it matters how much we have. A foot in this shell game, particularly an American foot is no small matter to the long term health of the awakening dragon. Yet as Billmon points out congress can do nothing more than bluster about stopping this. Team Bush continues to work hard day and night to keep this nation’s pants down around our ankles, and our torso bend over the barrel. This purchase will show the world who the real paper tiger is, much to our misfortune. This situation alone should be enough to run Team Bush out on a rail.
Posted by: patience | Jul 6 2005 3:21 utc | 10
A way out of the dilemma?
Perhaps oil may go out of fashion for power. Wind power has been around for years, but a new survey by post-doc fellow Cristina Archer at Stanford U indicates that there is much more energy available from wind power than was previously suspected — enough to supply energy in North America and the rest of the world several times over. Archer says that North America has lots of sites for potential wind farms (as does N. Europe), and that wind farms in different areas can be linked together so that there is a steady supply of electricity.
See Stanford Report, June 24, 2005
‘Apollo Program’ for hydrogen energy needed, Stanford researcher says
You can do Google searches on this yourself — there really is a lot of information — “wind” “Cristina Archer” “Stanford”
The problem is, first the public and politicians have to wrap their brains around this new idea. Then an infrastructure of wind farms in coastal areas and other high-wind areas of North America, etc. has to be built. Expensive.
But all of this will be considerably cheaper than a war with China over oil.
In a TV interview on the Discovery Channel, Cristina Archer said that people from around the world have been sending her enthusiastic e-mails, saying that her conservative estimates for wind power in their areas are far too low (data 20 years out of date).
Posted by: Owl | Jul 6 2005 9:47 utc | 11
@Owl: That’s the best news I’ve heard all week. I was just thinking, last night when I got home from work, that I couldn’t bear to read this thread all the way through because it was bound to be all bad news (which, to be fair, it mostly was) and I was too tired to handle it. Thank you!
Posted by: Blind Misery | Jul 6 2005 15:04 utc | 12
@blind misery…All that news sounds bad but it really isn’t. Bad would be not getting any info on what the bugs are doing under the rug.
Can all this nasty info be ignored because it is uncomfortable and dangerous? No.
Posted by: rapt | Jul 6 2005 15:37 utc | 13
@rapt: ignored, no. Deferred until the next day so I don’t stay up past 4 AM worrying, as has happened before, yes.
And, actually, I would say all this is bad news. Not getting it would be bad, too, but don’t fall into the facile trap of assuming that if one choice is bad, the other is necessarily good. That’s what got the Republicans a lot of support after September 11.
Posted by: Blind Misery | Jul 6 2005 16:03 utc | 14