China and Unocal

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


In the midst of trying to sift through the hysteria about China’s bid for Unocal, I stumbled across this Sebastian Mallaby column that explains very clearly why this deal is nothing to fear:

What if there were a real oil crisis? A simulation conducted last week in Washington suggested that a couple of middling terrorist attacks in Saudi Arabia and Alaska would be enough to cause a global oil shortage, sending prices above $100 a barrel. Yet Chinese ownership of Unocal wouldn’t affect this picture. China could respond to the crisis by routing Unocal’s energy to its own industries. But again, oil is fungible, so this wouldn’t matter.

That’s right, and I’m a bit puzzled why economists like Paul Krugman seem to have suddenly forgotten everything they know about international markets and free trade on this subject. See also this old Tyler Cowen post on a very similar point. Now we already have Bill Gertz of the Washington Times running around screaming and over-hyping the Chinese military threat; we certainly don’t need confusion and alarm about an oil deal that, in the end, really isn’t going to affect the United States very much. To paraphrase Robert Farley, why should oil scarcity be any more a source of conflict between China and the US than it will between, say, Europe and the US? I haven’t seen any of the China hawks address this point yet. What could hurt the United States very much, however, is a mercantilist war between the two countries, fueled by misconceptions and heated rhetoric on both sides. It’s enough to make you think that Congress wants a war with China.

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate