The China National Offshore Oil Company, commonly referred to as CNOOC and controlled by the central government, has taken a 1/3 stake (pending US approval) worth $2.2 billion, in the energy assets of a US energy industry powerhouse, Chesapeake Energy from Texas.

Where’s the uproar?  I don’t hear many alarm bells?  Why haven’t the Tea Party groups made their voices heard on this issue across the nation as we approach November 2nd?

The US government takes a stake in Citibank- Chrysler-and GM, and American’s freak out and proclaim they’re not going to do business with “those” companies, you know “government motors.”  (there’s a short book that could be written about that thought process, another time perhaps).

Meanwhile, the Chinese central government continues to buy up US assets, to now include a big chunk of Chesapeake Energy, and the chorus is not the same.  Of course, it isn’t just China using “sovereign wealth funds” (translation: government money) to buy up US assets.  

In any event…

CNOOC is a government owned and controlled company.  Contrary to what the mainstream financial press want you to believe, China is a Communist country.  Most of their industry is controlled by the central government, or at least majority “owned” by the central government.

Apart from the fact that US companies could not go to China and buy a 1/3 stake in a Chinese energy company and the implicit unfairness and weakened position Americans enjoy because of that fact, there are real security risks here.  The Chinese want access to, and knowledge of, American technology that allows us to create fuel from shale rock.  They want to learn it, buy it, control it, and at some time outsource it back to China.  Why?  To secure their domestic energy needs in an effort to strengthen their economy and military to facilitate their ongoing effort to challenge the US in our protection of Taiwan, our influence in the Pacific rim, and our sole superpower status globally.

China gets nothing without some Americans agreeing to it.  Once again American citizens, in this case the management and the board of Chesapeake, have put America second behind money, some level of greed, and I’m sure some hope of gaining access to China in the future.

The list of companies managed by our fellow citizens like those at Chesapeake, among many industries, which paved the way for foreign dominance over what were once American controlled companies/industries is a long one: textiles, machine tools, telephone exchange and billing services, consumer electronics, photo imaging and copying, heavy truck manufacturing, oil & gas, water and electricity distribution, and the major motion picture industry…just to name nine.

The US Commission on Foreign Investment in the United States should be alarmed by this deal.  They should block this deal.  I doubt they are, or that they will.

The Commission has turned a blind eye to controlling foreign direct investment into the US ever since it’s inception.  I remind you, more often than not as a result of decades of poorly negotiated trade policy, US companies don’t have the same ability to buy assets in foreign countries, particularly Asia (read China), as foreign companies ability to do so here in the US.  On top of that, most American investment banks have been and continue to take a lead role in facilitating this 30 year trend that has involved massive transfers of ownership of US assets from Americans to foreign nationals.

Note:  In this example, CNOOC has the money to make this investment because of our massive trade deficit with China that has erupted since Bill Clinton agreed to establish Permanent Normal Trade Relations (PNTR) with China in 1999.  40 years of poor trade policy punctuated by PNTR, a weakened spirit of nationalism among Americans generally, though specifically in the executive suite and corporate board rooms, tied to too much consumption resulting in too little savings brings us this type of challenge:  a company controlled by a Communist government buying a significant stake in a strategic US asset.  Amazing!