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Tensions Increase over China Unocal Bid

RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

Members of Congress, both Democrat and Republican, have reacted angrily to yesterday's comments by China. The comments concern a Chinese company's unsolicited takeover bid for US oil concern Unocal. Beijing made a strongly worded statement and accused the US Congress of, quote, "mistaken ways." It said it was politicizing economic and trade issues. NPR's Rob Gifford is on the line from Beijing.

And, Rob, why do you think the Chinese issued such a strong statement?

ROB GIFFORD reporting:

Yes, it is a very strongly worded statement. It surprised a lot of people. Of course, it shows the annoyance in China at how some members of Congress have been viewing CNOOC, the Chinese company's, $18 billion unsolicited takeover bid of Unocal. The Chinese feel that they're really playing by the rules here. They really feel this is an economic transaction. You know, they're not invading other countries. They're not trying to create coups in African countries where there is oil to be had. They're not doing anything illegal. It's, in their eyes, a simple economic transaction. So they're very annoyed at what some people in Congress had previously been saying about blocking the bid.

The other thing to say on this I think is that the Chinese have not really worked out how the US government works. I mean, after 25 years, they still don't realize about the separation of powers and that just because Congress or some congressman say things that that doesn't necessarily mean that's the US government's stance.

MONTAGNE: Has there been an official reaction to the complaints from Congress?

GIFFORD: I've been trying to reach the Chinese foreign ministry for the last few hours and have been unable to get any response to what the congressmen said yesterday about this Chinese statement. And my sense is that they probably realize that this statement went overboard a little bit. It was a little bit too strong, and so I don't imagine we'll be seeing anything quite so belligerent today coming out of the foreign ministry. Who knows? But I think there's a sort of propaganda machine here that goes into action when there's an issue that has to be dealt with, and sometimes just the legacy of the old days, that goes a little bit too much into overdrive and releases a slightly too strongly worded statement.

MONTAGNE: So the possibility, of course, is the statement could backfire.

GIFFORD: I think it definitely could. Certainly, if you look at how some of the members of Congress responded yesterday when the statement was announced, there were congressmen and women lining up to say the Chinese government cannot demand anything of the US Congress because the statement said, `We demand,' the Chinese government demands that the US Congress correct its mistaken ways. That's like showing a red flag to a bull to many congressmen because I think, as they said yesterday, that will make them more determined to look into this bid and to really, really check it out as to whether it in any way damages American national security.

MONTAGNE: And how is this matter playing out in the press and on the street there in China?

GIFFORD: It's not a huge issue. It's been in the press. Of course, the government controls the press on major issues like this and has said this is a win-win situation in many of the editorials in the government-run press. I think a lot of ordinary people, though--I mean, it's not something that impacts on their daily life, but I think they feel, as the government does, that why--this is an economic situation. This is not a political issue. And, as one women said to me last week, `The US goes to war in Iraq and Afghanistan in order to get its oil. We just make a bid to take over a company in a normal business transaction. Why would that not be allowed?'

MONTAGNE: NPR's Rob Gifford in Beijing, thanks very much.

GIFFORD: Thanks very much, Renee. Transcript provided by NPR, Copyright NPR.

Rob Gifford
Rob Gifford is the NPR foreign correspondent based in Shanghai.