"The bid by the China National Offshore Oil Corporation (CNOOC) to acquire the U.S. energy company Unocal for $18.5 billion raised many issues with U.S. policymakers. Even though CNOOC ultimately withdrew its bid in the face of considerable opposition from some Members of Congress and other commentors, many economic, financial, and security issues are still to be resolved. The CNOOC bid came at a time when China had become the second largest consumer of petroleum in the world and, rather than being a net oil supplier to the world, had become heavily dependent on imports. This new strategic challenge for Beijing had apparently caused it to pursue a more secure energy supply. The CNOOC bid also coincided with a period of high oil prices caused partly by China's increasing demand, growing uneasiness in the United States over the rise of China and the security and economic challenge it was presenting, the large bilateral trade deficit with China, and concerns about whether Beijing was playing by international trade rules--particularly giving insufficient protection to intellectual property rights and systematically holding down the value of its currency."
CRS Report for Congress, RL33093
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