The $18.5 billion takeover bid by CNOOC for Unocal has become much more than a mere international merger proposal. It has spawned an intensifying international controversy, which forces us to reflect seriously on the energy strategies of both China and the United States - including their prospects for energy co-operation in the future.
If both countries make competition for oil a top priority, there is a good chance their future energy strategies will be dominated by zero-sum calculations - in which one party must lose, the other win.
There is no denying that China's forays are a major reason for recent increases in global oil demand. Most observers, however, fail to mention the other big player - the US. In terms of absolute volume, America is the world's largest buyer of oil. This has been made all the more problematic under the Bush administration, which favours enlarging supply over reducing consumption to balance the oil picture.
The international community has eyed China's efforts to gain outside energy resources with suspicion and alarm. But isn't China only filling its needs, like the US? China has an energy-security policy known as the 'go-out strategy', which directs it to tap into foreign reserves to fulfil rocketing domestic demand for oil and gas.
In fact, CNOOC's merger with Unocal would open a new chapter for the strategy, in the sense that a state-owned Chinese oil firm is seeking to gain control over oil and gas resources by the most internationalised and market-based means possible.
It also must be acknowledged that this merger would pose no harm to American national security. With China's increasing dependence on imported oil and gas, CNOOC's failure here would only push Chinese energy decision-makers to turn back to Iran and Sudan with rekindled interest. In short, if the deal suffered a politically motivated defeat, it would only propel China and the US further down the track of mutual suspicion.
Co-operation is the only way to achieve a win-win situation. China and the US have conducted energy dialogues for years via the National Development and Reform Commission (NDRC) and the Department of Energy. Recently the theme of these talks has shifted from energy-saving technologies to energy-security strategies.