The $18.5 billion bid raises a number of thorny policy questions. Among them: Would ceding control of a major oil company to a communist government-controlled entity pose a national security threat? And if the bid were to be blocked, would China retaliate against U.S. companies seeking to expand in China? These questions would be considered by a special national security panel if Unocal accepted the CNOOC bid.
Ultimately, however, the proposed acquisition might best be viewed as a wake-up call to U.S. government leaders, who've done little to prepare the American economy for the tidal wave of competition presented by the rising economies of Asia, particularly China.
China has a population four times the size of the United States' and an economy that's growing two to three times as fast. Even when it's not buying oil and gas companies, it's buying oil and gas - and other resources - driving up the cost to U.S. consumers. Demand from China is one reason oil is about $60 a barrel.
Less spendthrift U.S. practices could moderate the impact of China's ascendancy. Last year, the United States ran a $160 billion trade deficit with China. That gave the Chinese a lot of dollars with which to buy pieces of American capitalism - and to raise questions like those the Unocal bid raises.
Cutting the trade deficit involves revamping tax policies and other steps to encourage Americans to save more and spend less. That might sound tough. But in the long run, it's less likely to cause pain than continued reliance on the kindness of strangers.