Chinese Company Ends Unocal Bid, Citing Political Hurdles

The China National Offshore Oil Corporation (CNOOC) has withdrawn its takeover bid for America's Unocal, discouraged by political opposition that complicated the deal. CNOOC's offer was the largest takeover bid ever attempted by a Chinese company, and considerably larger than Chevron's competing bid, but it faced strident opposition in Washington. Set on the backdrop of a rapidly expanding Chinese economy, the takeover battle between CNOOC and Chevron reflected intensifying trade and political tensions between China and the US. China's state-owned energy companies today are looking to fill growing energy demands with foreign oil, but Washington officials worried about ceding control of strategic assets to a potentially hostile power. CNOOC officials protested that the bid was "purely commercial" and called American opposition "regrettable and unjustified." Combined with economic conditions that are already tense, will the failure of CNOOC's bid further damage US-China relations? – YaleGlobal