Friday, July 22, 2005

Selling fireworks to China?

I am usually a strong proponent of free trade and the free market system. The open way in which this country's populace has gone about its business is, by and large, what has made us so successful as a nation. And, growing pains notwithstanding, I've begun to recognize the benefits of the North American Free Trade Agreement (NAFTA). It still has some major flaws and imbalances (for example, the heavy export from Mexico of "undocumented laborers", fed by racial strife), but, over time, many of the troubles have begun to self-correct. Towns around here which used to be run by a handful of giant corporations have been forced to figure out how to survive on their own wits, and they're beginning to succeed. Isn't that really what this country is all about? CAFTA, too, has multiple benefits. Where there is free and fair business, there is growth in employment, growth in education, and reduction, generally, in violence.

So, for the most part, working out a free trade agreement with China is a really good plan. Yes, we want them to open up their doors to our businesses. Yes, we want them to make their factories safer and more honorable places of employment for their people, and yes, we want to be able to sell our goods in China the way China sells their goods to us. Balance always sounds like a swell way to run things. But suddenly I am made uneasy. China wants to buy the California based fuel company, Unocal.

Sure, they say it's a corporation -- the China National Offshore Oil Corporation (CNOOC) -- not the military, long-inimical-to-freedom government. And they're buying majority interest in a puny little oil company that provides very little of our petrochemical necessities. No big, right? But let me rewind a bit. CNOOC is controlled by the Chinese government. China is run by its military powers. They still jail or execute people who speak -- however civilly -- against government actions. If you don't believe me, ask the relatives of some of those folks who used to live where the new Olympic Village is being built in Beijing. Objecting to tractors leveling their houses with no compensation or relocation got several homeowners summarily killed (I guess that's where the Supreme Court found its eminent domain precedent).

Still, it's not that aspect of doing business with China that worries me. There is, in fact, good argument that the more they get tied to us with trade, the more they'll be forced to free their own citizenry. The working class can become the buying class, and that gives them immeasurable power in the long run.

No, the concerns over allowing Chinese government interests to buy Unocal is that it gives them an inordinate amount of military power not even tied to the petroleum. Unocal, according to the Center for Advanced Defense Studies, owns the only remaining rare-earth mine in these United States. Said rare earth is necessary for a number of defense applications, including polishing satellite lenses for clarity. Other applications are less known to the public, but equally crucial for our protection, used in the high-tech toys for boys in uniform. With China having a controlling interest in Unocal, the US military would be dependent upon China's government for rare earth. They would have us, as the saying goes, by the short and curlies.

Also, American stockholders in Unocal will likely be financing any actions China may make against our allies. First, Unocal owns a large portion of the petroleum supplied to many free Southeast Asian nations, and China, owning the company, could easily cut them off to destroy their economies. Then, too, the stockholders would be handing over money to the Chinese government for any overt military actions they are likely to take against our allies.

Further, Unocal owns deep ocean technology they've used for mapping, but can be applied equally effectively against us in submarine warfare. China has continued to develop its submarine navy at what some of its neighbors (especially Japan) describe as "an alarming rate". Knowing that the Chinese government has already made threatening statements and continues to have territorial disputes with many of its neighbors, and (as we've already established) many of those neighbors are strong allies to the US, we would likely be called for help. Are we going to encourage the development of military technology in a country we may be asked to fight? If we support China in this, how do we have the right to say we support our own troops, our own navy?

Again, I think free trade is dandy, but before we go selling metal and fireworks to our neighbor, don't we have a responsibility to make certain that he's not going to use them to build guns to terrorize the neighborhood? And, if we can't make that guarantee, do we even have a right to make this sort of business transaction? Does this nation's cash register ring more loudly than its alarm bells?


At the time of writing and submission to the Daily Review Atlas, negotiations were still ongoing for the purchase of Unocal, by either China or another American oil giant, Chevron. On Wednesday, the Unocal board of directors recommended the shareholders accept the offer from Chevron. The deal is not yet done, but by Thursday, China had announced it was no longer linking its yuan to the American dollar. (I, personally, can't help but believe there is some connection.)


Also worth reading:Max Boot's LA Times column:"China's stealth war on the U.S."

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