and Gas," Congressional Research Service (CRS)
1. For a discussion of the Pentagon's 2005 Annual
Report for Congress, RS22182, July 1, 2005, p. 2.
Report, see Ted Galen Carpenter and Justin Logan,
"The Pentagon's Surprisingly Sober Look at
14. Quoted in Russell Gold, Matt Pottinger, and
China," National Interest, August 2005. Although
Dennis K. Berman, "China's Cnooc Lobs in Rival
Carpenter and Logan view the report as mostly bal-
Bid to Acquire Unocal," Wall Street Journal, June
anced, they contend that the Defense Department's
23, 2005, p. A9.
estimate of PRC military spending, $90 billion by
year-end, far exceeds more reasonable estimates
15. Thomas Donnelly and Melissa Wisner, "Chinese
from the RAND Corporation, which expects
Power Play," Weekly Standard, July 29, 2005, www.
China's defense spending to range between $31 bil-
aei.org/include/pub_print.asp?pubID=22923.
lion and $38 billion in 2005.
16. Kevin A. Hassett, "CNOOC Episode Unites
2. Frank J. Gaffney Jr., "`CNOOCered': The Adverse
Protectionists and Hawks," Bloomberg, August 8,
National Security Implications of the Proposed
2005, www.aei.org/publication22971.
Acquisition of Unocal by the China National
Offshore Oil Corporation," Testimony submitted
17. Dick K. Nanto, James K. Jackson, and Lawrence
to the House Armed Services Committee, July 13,
Kumins, "CNOOC, Ltd. Bid for Unocal," CRS
2005, www.centerforsecuritypolicy.org/Gaffney
Memorandum, July 11, 2005, p. 4.
ChinaTestimonyf7122.pdf.
18. It is interesting to note that Chinese energy
3. Quoted in Brody Mullins and Dennis K. Berman,
companies are subject to domestic price controls
"Republicans Urge White House to Review Cnooc's
and, as a result, have been selling their crude oil
Unocal Bid," Wall Street Journal, June 29, 2005, p. A4.
abroad for a profit. So China itself is diverting
"strategic assets" to where they fetch the highest
4. David Greising, "China Scraps Its Unocal Bid,"
price. Why was Congress worried that CNOOC
Chicago Tribune, August 3, 2005, pp. 1, 8; and House
would act differently? Meanwhile, the shortages
Committee on Resources, "Conference Completes
and long lines at gasoline stations in China,
Work on Energy Policy Act," news release, July 26,
caused by below-market prices, have led to the
2005, http://resourcescommittee.house.gov/Press/
partial relaxation of price controls. So China
releases/2005/0726energybill.htm.
appears to be learning the lessons the United
States painfully learned from imposing price con-
5. "CNOOC Bows Out of Unocal Bidding amid
trols in the 1970s. See Peter Wonacott, "China
Political Furor," Investor's Business Daily, August 3,
Eases Shortage at Gas Stations," Wall Street
2005, p. A1.
Journal, August 19, 2005, p. A11; and "China Does
Caternomics," editorial, Wall Street Journal, August
6. Quoted in Matt Pottinger et al., "Cnooc Drops
19, 2005, p. A12.
Offer for Unocal, Exposing U.S.-Chinese Tensions,"
Wall Street Journal, August 3, 2005, p. A8.
19. See Holman W. Jenkins Jr., "China Joins the
Club," Wall Street Journal, July 27, 2005, p. A13.
7. Albert Keidel, "China's Growing Pains Shouldn't
Hurt Us," Washington Post, July 24, 2005, p. B5.
20. Excerpted from the July 13, 2005, audiotapes
of the hearing.
8. See "Detailed Amendments to the Constitution,"
March 15, 2004, www.chinaembassy.se/eng/xwdt/t
21. Neil King Jr., Greg Hitt, and Jeffrey Ball, "Oil
101768.htm.
Battle Sets Showdown over China: Cnooc's Offer for
Unocal Raises Stakes in Conflict over Sino-U.S.
9. Jasper Becker, The Chinese (New York: Free
Ties," Wall Street Journal, June 24, 2005, p. A.10; and
Press, 2000), p. 157.
Nanto, Jackson, and Kumins, pp. 67. For more
10. Charles Hutzler, "China Promotes `Peaceful Rise'
information on CFIUS, see www.treas.gov/offices/
to Quell U.S. Fears," Wall Street Journal, September
international-affairs/exon-florio.
13, 2005, p. A15.
22. Quoted in Loretta Ng, "Citing `Political
11. Quoted in Robert J. Samuelson, "China's Oil
Environment' Cnooc Backs Off Its Bid to Acquire
Bid: A Battle to Avoid," Washington Post, July 6,
Unocal," New York Sun, August 3, 2005, p. A7.
2005, p. A17.
23. Statement available at http://tancredo.house.
12. Quoted material from House Resolution 344,
gov/pressers/0706UnocalChinaScript.htm.
June 30, 2005, http://thomas.loc.gov/cgi-bin/query
24. See Samuelson, p. A17.
/D?c109:1:./temp/~c109nZltvE.
25. Jerry Taylor, Written testimony submitted to the
13. Bernard A. Gelb, "Unocal Corporation's Oil
12