The future of trade relations between the United States and China has become uncertain following the failure of a Chinese takeover bid for the US oil company Unocal. The Chinese former state oil company CNOOC abandoned its attempt to buy the American company on Tuesday, following the passing of new legislation by the US Congress which made the deal virtually impossible.

CNOOC and the Chinese authorities say the handling of the takeover bid was unfair. Analysts are concerned that this could make things difficult for US companies wishing to invest in China.

The way is now free for Chevron, the second largest oil company in the US, to purchase Unocal. Chevron had already offered 17 billion dollars, when it was trumped by the Chinese bid of 18.5 billion.

(rnw.nl)

<font color = lightgreen>This was actually a good thing--we don't want a major oil company winding up in the hands of a country who really does not have our best interest at heart. </font>

Fair? Let's talk fair. A U.S. company wouldn't be allowed to own any Chinese company. Allowing a communist country to compete as an actor in our capitalist country breaks the market model, because they won't reciprocate and allow us to compete in theirs.

As for trade with China -- let them pull out of trade. We'd LOVE it. It would bring jobs back, for sure.

How much of our National Debt does China own?

A ton. Of course, if we tell them we won't pay, what will they do? Just cancel the debt.

I don't think it's that simple. Isn't much of our foriegn debt exchanged in the form of bonds available, in part, on the open market?

Won't that huge of a sell-off of bonds would upset the market in a serious way. Wouldn't we have to buy our debt back to save the market? And wouldn't refusing to honor bonds destroy thier credibility as a safe investment?

I'm no economist, but I thought I'd throw these idea sout to see if they fit or not.

[ 08-04-2005, 05:06 PM: Message edited by: Chewbacca ]

Let me guess, if it's other country ( example england, japan etc ). The bid to own the oil company will be successful? :rolleyes:

Of course it's MUCH more complex, Chewie, I was just having some fun. Canceling the debt would be akin to nationalizing it -- what Harvard economist Lester Thurow would call a "communistic economic practice."