BEIJING (AFP) - China angrily responded to a vote by US lawmakers urging the Bush administration to block the 18.5 billion-dollar bid by China National Offshore Oil Corporation (CNOOC) to take over US oil group Unocal.
"We demand that the US Congress correct its mistaken ways of politicizing economic and trade issues and stop interfering in the normal commercial exchanges between enterprises of the two countries," China's foreign ministry said in a statement.
"CNOOC's bid to take over the US Unocal company is a normal commercial activity between enterprises and should not fall victim to political interference.
"The development of economic and trade cooperation between China and the United States conforms to the interests of both sides."
On Thursday, the House of Representatives voted 398-15 for the non-binding resolution that calls on the US government to block the Unocal bid.
A takeover by a Chinese state-run firm "would threaten to impair the national security of the United States," the resolution said.
"The Chinese government's control of CNOOC made the bid possible, not the free market," said House Democratic leader Nancy Pelosi ahead of the vote.
"We cannot, in my opinion, afford to have a major US energy supplier controlled by the communist Chinese," said Representative William Jefferson of Louisiana.
CNOOC Saturday asked the US Treasury Department to review the acquisition plan in an effort to clear up doubts over the bid and get the regulatory process rolling before Unocal's board of directors votes on the acquisition in late August.
"It's a voluntary notice from CNOOC Ltd. We hope the review will enter formal proceedings as soon as possible as we are sure that the transaction is purely commercial," CNOOC spokesperson Yang Hua said in a press release.
"This filing gives CNOOC the opportunity to comply with all US rules and regulations in an open and transparent manner ... we are cooperating fully and look forward to a formal review conducted in an expeditious manner."
CNOOC, China's third largest oil and gas producer, announced its bid on June 23 trumping a bid by Chevron by some 1.5 billion dollars.
US investment banks JP Morgan Securities and Goldman Sachs are advisors on the deal and will provide 3.0 billion dollars to CNOOC's bid. China's state-owned banks will also put in some 6.0 billion dollars, reportedly at better than market rates.
Unocal's board of directors have voiced preference for the Chevron bid despite the CNOOC's better cash offer and a pledge not to lay off any of Unocal's workers.
The US Treasury's Committee on Foreign Investments (CFIUS), has only barred one transaction out of the 1,500-odd it has examined since 1988 and that was in blocking a Chinese company from taking over a US firm.
"Basically for me this is a routine commercial activity, but anytime something like this happens in a sensitive industry like oil, you are going to get a lot of political interference," Dong Tao, an analyst with Credit Suisse Boston in Hong Kong told AFP.
"If the US Congress is saying that this bid will undermine national security, then they better watch out because the Chinese parliament could also come out and say the same thing about US banks buying up Chinese banks."
A successful CNOOC bid would help Beijing recycle US dollars that are piling up in China due to its voracious export driven economy, he said.
"China needs to recycle money back into the US and is already buying a lot of US treasuries to balance its capital account," Dong said.
"If CNOOC can buy Unocal then this would work in the same way."