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CNOOC's Unocal bid may benefit US economy
Updated: 2005-07-05 06:03

Some American leading economists have said that China's push to buy US companies such as Unocal Corp. and Maytag Corp., might benefit the American economy despite sparking a political outcry in Congress.

China National Offshore Oil Corporation's (CNOOC) oil rigs is seen in China's Liaodong Bay of the Bohai sea February 3, 2005. [newsphoto]
Overseas takeovers of US firms often brought an inclusion of capital and additional markets, according to Catherine L. Mann, an economist at the Institute for International Economics in Washington.

"It turns them into a stakeholder," said Stephen Roach, chief global economist at Morgan Stanley Co. in New York. He further noted that it was better for the US economy to have China using some of the dollars generated by its trade surplus with the United States to acquire American corporations.

Donald H. Straszhein, former Merrill Lynch & Co. chief economist, said that China's buying of American corporations was " just the beginning", and "there are going to be big numbers in the next couple of years." He predicted that Chinese acquisitions of US companies would approach 80 billion dollars over the next two years, up from an estimated 7 billion dollars in 2004 and about 344 million dollars five year ago.

"Foreign investment generally delivers better jobs to Americans, " said Dan Griswold, a trade analyst of a Washington-based research group. "We sacrifice our own economic well-being if we create a hostile environment."

These American economists' view contracted sharply with the political mood in Washington, where the US House of Representatives voted 398-15 June 30 to demand that President George W. Bush review CNOOC Ltd's bid for Unocal Corp.

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