Let the Chinese Bid
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
For the ironies of global capitalism in the 21st century, it doesn’t get much better than this – a Communist Chinese company wants to outbid Chevron for Unocal, but the Chinese company might be blocked by American regulators. In other words, the Chinese Communists are playing by capitalist rules by bidding for a company in the free market. And the American government may interfere with the free workings of capitalism by moving to block the Chinese from bidding at all on the American oil company.
Just framing it that way makes it clear that the right move for American regulators is to let the Unocal shareholders maximize their value by selling their company to the highest bidder, no matter from what country the buyer is. Anything less is a kind of protectionism that could cost the Unocal shareholders about $1.5 billion – the amount by which the Chinese company’s offer reportedly exceeds Chevron’s.
These columns bow to no one in their enthusiasm for bringing democracy and freedom to Red China and in their disgust for how the tyrants in Beijing have tried to squash those concepts. There are more steps America could take to aid Chinese dissidents and minority groups. But it’s hard to see how the cause of either political or economic freedom in China is advanced by demonstrating to the Chinese that the sale of an American business is subject to the possibility of a veto by the American government.
The Bloomberg wire service quoted Senator Corzine, a Democrat of New Jersey, as saying the deal would have to pass a political or national security hurdle in America. “There will be issues about foreign holdings of strategic assets,” Mr. Corzine was quoted as saying. Plenty of oil and gas reserves are already in the hands of American enemies such as the Saudis and the Iranians. The right response isn’t protectionism. It’s setting a free-market example, then helping to advance freedom in Saudi Arabia, Iran, and Communist China. And then for individual Americans to use their ingenuity to pursue and develop yet-undiscovered sources of energy other than oil and gas, creating companies that decades from now free Chinese or Saudis or Iranians may want to buy for billions of dollars on the free market.
