Leave China's bid alone, US Government told

BOSTON - Corporate America is urging the Government to steer clear of intervening in the US$18.5 billion ($26.7 billion) bid by a Chinese state-run firm for California-based Unocal.

Several American politicians are calling for the White House to block the takeover by CNOOC.

But the executives say the Bush Administration should let the market decide whether CNOOC's offer or a rival bid from Chevron comes out on top for the 9th-largest US oil and gas producer.

Amid growing unease in Washington over China's ballooning trade surplus and its military power, a United States Government panel is expected to examine whether national security would be threatened by the deal.

But many of America's blue-chip companies - including General Motors, United Technologies and Boeing - were careful not to offend either Washington or Beijing over the controversy and declined to comment on the CNOOC matter.

"Even if we were opposed to the deal, there is nothing to be gained by speaking out on the CNOOC deal," said a spokesman for a blue-chip firm who asked not to be identified.

"We wouldn't want to say anything that would jeopardise our relationship with the folks in Beijing."

General Electric, often considered a bellwether for corporate America due to its range of businesses from industrial to finance and media, said China stepping out into the world was a natural evolution of the country's growing economic power.

But GE executives carefully avoided a question at an analysts' meeting on Tuesday about whether deals such as CNOOC's posed a threat to its business.

A few company executives stepped out from the shadows following the bid, saying that blocking the deal would send the wrong message after US officials and corporations have encouraged China to adopt more open policies regarding foreign investment.

"I would be very concerned because I think it's an indication of a Government stepping into the free-market system where they generally don't make good long-term decisions," said Illinois Tool Works president David Speer.

Even an oil industry rival urged the US Government not to become involved. Exxon Mobil chief executive Lee Raymond said last week that it would be a "big mistake" if Congress interfered with the transaction, because it would come back to haunt American companies looking to do business abroad.

- REUTERS