Economist.com

Economist.com:

This may seem unrelated but the Caspian Oil reserves and pipelines in Central Asia are one of Unocal's interests. Plus China is playing more and more of a stratigic role in C.A., even a military base in Kyrgyzstan.

Here is an excerpt from the article:

"Buying security Against this background a significant drama is being played out: the $18.5 billion bid by CNOOC, a Chinese state-controlled company, for Unocal, an American oil company. It is not the first time that the Chinese have bought abroad to ensure access to commodities, nor the first time that a Chinese enterprise has bid for an American one. But coming at a time when the price and availability of energy are looking a tad dubious, the bid has provoked an outcry in the land of the free.
What is overlooked in the general xenophobia is that China already plays a big part in bankrolling spendthrift America. Thanks to its trade surplus, it now owns several hundred billion dollars-worth of US government and agency debt. Bond yields are low, the yuan is more likely to rise against the dollar than fall, and China is engaged in a dash for economic growth. Is it any wonder that it wants to buy an oil company which, even if bought at a premium, is likely to return more than 4% a year in a dwindling currency, and might improve Chinese energy security in the bargain?
The trouble is that if China makes a habit of snapping up vulnerable American companies, it might decide to buy fewer Treasuries�and that could cause trouble. Alan Greenspan is likely to have this point in mind along with the likely impact of higher oil prices on a slowing economy when the Federal Reserve meets later this week to decide whether to keep raising interest rates. Now, that is a conundrum."