The bid for Unocal has ["little to do with security of supply for China,"] says Derek Butter, an analyst at energy consultancy Wood Mackenzie in Edinburgh, Scotland. Instead, he says, it has more to do with China's desire to create a large corporation that ["can compete with the other international companies, and has the skills in the future to negotiate its way into large projects."]"

The bottom line, according to this alternative point of view is that China's bid for Unocal is a bid toward becoming a major oil producer with a global presence, rather than to add to China's reserves for its own personal use.

In our opinion, the Journal, while clearly listing some interesting observations is missing an important point.

China's purchase of Unocal, even if it did not lead to the diversion of natural gas toward its own borders, would give it control of the energy supply used by Thailand, Myanmar, Bangladesh, and Indonesia. It would also put some pressure on Japan and South Korea.

In other words, in one fell swoop, China would become the energy czar for a significant portion of South East Asia, and would gain valuable leverage with which to further its other goals, the expansion of its influence, and the ability to project its power. A scenario in which China could use its leverage to gain concessions from the four countries mentioned, including the placement of military bases, fueling stations for submarines and merchant ships, and the placement of surveillance equipment and communication relay stations in all of those countries is an easy next step to visualize.

All the while, China could also make money by continuing to sell energy to those countries by honoring existing contracts, while negotiating more lucrative ones in the future.

Indeed, the Unocal purchase can easily be looked upon as a threat to national security, especially if you live in Thailand, Myanmar, Bangladesh, Indonesia, Japan, or anywhere else in Asia.

Originally posted by RockerDom
The DoD estimates that feeding a troop stationed in the US costs 150 a month. I imagine that feeding a troop stationed overseas may cost about 250 a month, if not more.

Originally posted by RockerDom
Now, let's assume that China spends much less (they are communists after all) per troop. Let's say they spend only 50 per troop, per month. And we can reasonably assume that a drafted Chinese army could mean 50 million troops. That's 500 million dollars a month just to feed them on Chinese soil. That doesn't count armor, weapons, ammo, training, logistics, etc.

Originally posted by smirkley
$100 per bbl does seem a bit high to me for this year, for an average price, but I could easily consider $80 reasonable, based on today's futures.

China has been on a tear lately. They are buying up oil field rights right and left, they hold a large amount of US securities and debt notes, and their manufacturing ability and productivity show no signs of slowing down.

What else do you need to be the worlds superpower,... an army?