Beijing, August 4:

China’s state media condemned US political intransigence over oil group CNOOC’s bid for Unocal, saying its opposition called into question the free trade dogma Washington often trumpets to the world. “The high-profile takeover battle demonstrated to the world that the US is not a free economy as it claimed to be,” the official China Daily said in an editorial. “An asset for sale has not gone to the buyer that most prized it because of regulatory concerns fuelled by bogus fears and hidden interests,” it said of the deal that was aborted on Tuesday.

CNOOC, a state concern listed on the New York and Hong Kong stock exchanges but 70 per cent-owned by Beijing, drew heavy fire from Capitol Hill for its attempted takeover of the United States’ ninth largest oil group.

US lawmakers demanded that the White House block CNOOC’s bid on national security grounds and prepared a formidable array of legislative hurdles the Chinese firm would have had to overcome. China National Offshore Oil Corp ended its $18.5 billion quest for the California group citing the political obstatcles as too great a cost, a move that cleared the way for rival US bidder Chevron. “The unprecedented political opposition that followed the announcement of our proposed transaction was unjustified,” CNOOC said in a statement.

The China Daily editorial went on to say that not only had Unocal shareholder interests been damaged but that the failure would “poison the current prevailing mood as bilateral economic ties between China and the United States are enhance”. “The explicit message the takeover battle sends to the world is that American business is defined by political needs,” it said.

“That practice will incur many unknown costs for foreign investors. In the long run, the casualty will be US competitiveness if the market is to play second fiddle to protectionism with political patronage.”