Saturday, July 30, 2005

An End to the 39-Year War

The longest and deadliest conflict in the country’s post World War II history finally came to an end in late July. Northern Ireland? No, I’m talking about the conflict that surrounded Narita International Airport, Japan’s main gateway to the world.

This really was Japan’s longest and deadliest post-war conflict. It lasted 39 years and claimed the lives of 13 people. Thousands were arrested. It may not have been as deadly as the Irish “troubles,” but it was more costly than Tokyo’s recent forays into international peacekeeping in Cambodia and Iraq.

At its heart the struggle was a kind of modern-day peasants’ revolt, pitting farmers and their allies against the government of Japan. The fundamental issue was universal: in a conflict of individual property rights versus the greater public good, which should prevail? In Japan private property won hands down.

Tokyo essentially capitulated years ago. In 1991 the then Minister of Transport declared that the government would no longer use force to acquire additional land for runway expansion. It also formally apologized to farmers displaced to build the first runway.

This act of “sincerity” allowed the government to persuade landowners to sell enough land to build part of the second runway in time for the 2002 World Cup, which was jointly hosted by Japan and South Korea. However it is still too short to accommodate jumbo jet takeoffs.

The final act in the 39-Year War was played out in late July when the airport authority announced that it has given up trying to persuade seven farmers holding small plots blocking the southern expansion to sell their lands. Some refused even to talk. “We did our best,” said authority president Masahiko Kurono.

He said that the runway expansion will proceed to its full 2,500 meter length from the northern end, where the government has succeeded in acquiring the necessary land. But the southern extension had been considered more desirable project for a number of reasons.

The 39-Year War began in 1966 when the Japanese government decided it needed another airport to supplement Haneda airport, the traditional gateway to Tokyo. It set its sights on a broad swath of farmland in nearby Chiba prefecture about an hour by train from downtown Tokyo. The government first tried to persuade land owners to sell then evicted enough of them through eminent domain proceedings to build the first runway. The farmers fought back aided by student radicals, who were then a potent force. Just before the airport’s opening the students trashed the control tower setting back the opening several months.

In the 1980s Narita looked like an armed camp, with barbed wire fences and passport controls. It was common to see gray riot police vans parked along the arrival and departure lanes, the riot policemen lolling around with their helmets and plastic shields close at hand.

To say that eminent domain laws are weak in Japan is an understatement. This is in stark contrast to the U.S., where the Supreme Court recently confirmed the right of states and cities to expropriate private property with compensation for practically any reason they see fit to raise.

It is the reason, for example, why Tokyo’s expressways snake their way over rivers and ancient canals rather than condemn private homes. It is the reason why Japan’s two newest airports, the Kansai Airport near Osaka and the brand new Chubu Airport near Nagoya, have been built on off-shore artificial islands at great cost.

One stands in awe at the power of these landowners and the tenacity with which they cling to their ancestral lands against the full might of Japan. A few of these the holdouts live just off the southern end of the runway and have had to contend with the constant noise of low-flying jetliners either approaching or taking off. Perversely, this seemed only to harden their resolve not to sell.

Yet it is also simply absurd that a country like Japan should have as its principal international portal, the gateway for 60 percent of its international visitors, one of the most important aviation hubs of Asia, an airport with essentially only one and a half runways.

Of course, much has changed since the start of The 39-Year War. As mentioned, two new international airports have opened near Osaka and Nagoya (the latter in time for the World’s Fair), which should ease congestion at Narita. A third runway was built at Haneda on Tokyo Bay.

Last year the Narita Airport Authority was created to run the airport in the latest privatization move. The government still holds 100 percent of the shares, but they may go public in 2007. Narita must operate at a profit at a time when it is facing competition not only from the two new airports in Japan but also from sleek new airports at Putong in Shanghai and Inchon, South Korea.

That means doing something about its exorbitant landing fees (said to be about 10 times those charged at Heathrow in England.) For example, the new Chubu airport, which opened in February, charges 665,000 yen for a Boeing 747 to land, while the fee at Narita for the same aircraft comes to 948,000 yen. The airport authority has proposed cutting landing fees by 20 per cent, which would make it more competitive with the other airports.

Some have advocated the re-internationalization of Haneda, now used almost exclusively for domestic traffic. After all, it served that function well into the era of advanced jets and is a convenient 20-minute monorail ride from downtown Tokyo. It even has three runways!

The last time there was a real contest for governor of Tokyo, one of the candidates, former foreign minister Koji Kakizawa, tried to make an issue out of promoting Haneda as an international airport once again. The issue didn’t catch fire with voters, most of whom, presumably, do not worry much about international travel.

The victor, Shintaro Ishihara, had his own idea for easing airport congestion and inconvenience. He wanted to kick the Americans out of Yokota AFB in the far western suburbs and turn it to civilian uses. This was a non-starter if there ever was one, not the least because Yokota’s remoteness and lack of adequate transportation links might make travelers nostalgic for Narita -- if that is possible.

Todd Crowell is the author of Tokyo: City on the Edge

Thursday, July 21, 2005

Job Growth: Australia vs. the U.S.

I wish I had been at the press conference for President George W. Bush and Australia’s Prime Minister John Howard at the White House last week. I would have liked to pose this question: “Prime Minister. Why is your country producing new jobs so much faster than the U.S. is producing them?

The prime minister might have found the question awkward. On one hand he ought to be pleased to have a chance to brag a little about how his economic policies have brought remarkable prosperity to his country. At the same time, it might have been embarrassing to the man standing beside him.

The economies of Australia and the U.S are remarkably similar. The unemployment rate at 5% is identical. Both economics are growing at a comparably respectable clip. Conservative politicians dedicated to free-market principles are in power in both places. The only difference is that the U.S. population of 295 million is about 15 times larger than Australia’s 20 million.

In June the Australian economy created 41,700 new jobs. Taking into account population differences, this is roughly equivalent to the U.S. economy creating 625,000 jobs. The actual figure was 146,000. In other words, Australia created four times as many new jobs on a per capita basis.

This was not a one-month anomaly. In the past ten months Australia gained 362,000 new jobs, or the equivalent, when population disparity is taken into account, of 5,400,000 jobs. In the same period the U.S. created about 2 million jobs. Thus Australia job growth is at least double that of the U.S.

Here are some figures to chew on. The first column is new job creation in the U.S., month by month. The second is new jobs in Australia, month by month, weighted by population differences (multiplying by 15) with the absolute figures in parentheses.

Job growth in the U.S.

Jun 146,000
May 104,000
Apr 292,000
Mar 122,000
Feb 300,000
Jan 411,000
Dec 155,000
Nov 132,000
Oct 282,000
Sep 130,000
Aug 188,000
Jul 83,000

Source: Bureau of Labor Statistics

Job Growth in Australia

Jun 625,000 (41,700)
May 210,000 (14,000)
Apr 103,500 ( 6,900)
Mar 867,000 (57,800)
Feb 300,000 (20,000)
Jan 667,500 (44,500)
Dec 435,000 (29,000)
Nov 367,000 (24,500)
Oct 655,500 (43,700)
Sep 952,000 (63,500)
Aug 99,000 ( 6,600)
Jul 324,000 (21,600)

Sources: Asia Cable; Australian Bureau of Statistics

Not even the Australians seem to understand why their economy is performing so well. “Unbelievable,” said Tom Kenny, a senior economist with Nomura Research Institute, as quoted by CNN about the June figures. One has to assume that that Australia is benefitting from China’s voracious appetite for resources.

Australia has recently ratified multi-billion dollar gas and coal deals with China and is currently negotiating a free-trade agreement. Indeed, Canberra’s burgeoning trade relationship with Beijing is a matter of concern in Washington, since it brings up the question of how reliable it would be should a confrontation over Taiwan should occur.

Australia’s Foreign Minister Graham Downey recently said words that cast doubt on whether the ANZUS pact would apply to Taiwan. I would imagine that this subject occupied more of the discussion between Howard and Bush behind closed doors than they let on during a press conference dominated by questions about Iraq.

The relatively weak pace of employment growth in the U.S. has been subject of some concern to those who pay close attention to the economy. For a while it became an issue in last year’s presidential campaign, but it never seemed to gain much traction, perhaps because the numbers have little meaning for most people by themselves. That’s why Australia adds a useful perspective.

But job growth has fallen out of the American discourse of late. From time to time, Paul Krugman gives the subject some thought, as he did in his recent New York Times column earlier, entitled “The Job Market’s Puzzle.” He seemed to be arguing that unemployment is worse than the official figures would suggest.

Berkeley professor J. Bradford DeLong writes on his website: “As I often say, the pattern of long-term unemployment, labor payroll employment numbers and the behavior of weekly hours all suggest a weak labor market with considerable slack and unused labor resources. Only the unemployment rate [5%] tells a different story. Why the unemployment rate tells a different story remains a great mystery.”

Again, one clue to the mystery might be found in Australia. In June the Australian work forced topped 10 million for the first time. Since the country’s population is 20.2 million, this means that 49.5% of the population is employed.

Applying that same percentage to the U.S. population of 295 million would produce a work force of 146 million, yet the actual size closer to 133 million. That leaves about 12 million people seemingly unaccounted for. Are they the ones who constitute the “slack?”

Of course, there may be many reasons why the Australian economy is performing better in this field, from demographics to structural reasons. I am not a skilled economist and wade into the field of statistics with some trepidation. Still they must be doing something right.


It has been reported that Australia will vote to support Japan’s proposal to expand the U.N. Security Council from 15 to 25 members, adding six permanent members that include Japan, Germany, India and Brazil. Thus, Canberra breaks with Washington, which opposes the proposal, while, of course, earning points with Tokyo and New Delhi. The vote probably will be held before the end of July.

Monday, July 18, 2005

"A Painful Diplomatic Debacle"

Tokyo badly miscalculated if it thought that its loyal support for Washington in sending troops to Iraq or allowing itself be drawn more closely to the defense of Taiwan would pay off in support for its own desire to become a permanent member of the United Nations Security Council.

When Japan’s plan to increase the membership of the Security Council from 15 to 25, with permanent membership for itself and five other countries, comes to a vote, probably sometime this coming week, it will likely fall short of the two-thirds majority, thanks in part to opposition from the United States.

Wrote the Asahi Shimbun: “Japan’s miscalculation was believing that the United States would support its reform proposal on the grounds that Tokyo is a loyal U.S. ally who would be welcomed into the elite club to help serve Washington’s interests. This is a painful diplomatic debacle for Tokyo.”

U.S. Secretary of State Condoleezza Rice told Foreign Minister Nobutaka Machimura by phone that Washington could not support Tokyo’s plan to expand the Security Council, which involves granting permanent membership to Japan plus Germany, Brazil, India and two African countries.

Earlier in the year Rice had rather off-handedly announced that the U.S. would support Japan’s having a permanent seat and perhaps a couple others. This was disingenuous, since giving status to Japan alone was sure to be defeated by China. Tokyo’s wanted to neutralize China’s opposition by wrapping its ambition in the larger expansion.

But that strategy depended on America’s support, which was not forthcoming. Now Washington has, in effect, let China off the hook by taking on the onus of opposition to Japan’s membership by itself. You have to wonder why Japan doesn’t just pull out of the U.N. in pique, taking a fifth of the organization’s budget with it.

TigerHawk ( speculates that Washington may have opposed Japan’s bid at this time to reward for Beijing for pressuring North Korea to return to the six-party talks, scheduled to begin in July 25. This is certainly plausible, since the timing seems to fit, although there were other inducements and pressures to get Pyongyang to return to the talks.

Neutralizing Pyongyang’s ambition to be a nuclear power is probably Washington’s highest foreign policy objective in Asia. It must have seemed important enough to stiff a key ally. Japan has hurt itself too by seeming to be more interested in the parochial issue of getting an accounting of its citizens abducted by North Korea than in ending a nuclear threat on the Korean peninsula.

Japan tabled its proposal, backed by 26 other U.N. members, on July 6. It adds 10 more seats to the 15-member Security Council, six of them permanent. Four of the permanent seats would go to Japan, Germany, India and Brazil and two others to as yet unnamed African countries, probably Nigeria and South Africa.

Changing the UN Charter requires approval of two-thirds of the members of the General Assembly (128 of the 191 members) and ratification by two-thirds of the membership including all five permanent members.

Since its inception in 1945, the permanent five council members have been Britain, China, France, Russia and the United States. The permanent members have a power to veto any Council decision, which guarantees leadership status in the international community.

On the face of it, Japan has a strong case. For one thing, currently provides 19.5% of the U.N.’s total budget, second only to the United States which, provides 22%. In other words, aside from the U.S., Japan contributes more than all of the other permanent members combined. It actively and constructively participates in U.N. peacekeeping actions (see list below).

Contributions of permanent members toward UN operating budget

U.S. 22%
Britain 6%
France 6%
China 2%
Russia 1%

Japan 19.5%

Japan’s recent contributions to U.N. operations

Afghanistan Refugee Relief
Angola Election monitoring
Bosnia Election monitoring
Cambodia Peacekeeping
El Salvador Election monitoring
East Timor Peacekeeping
Iraq Reconstruction
Rwanda Refugee Relief
Syria Peacekeeping (on Golan Heights)
Yugoslavia Election monitoring

China is still treated for budget purposes as a developing nation, even as it races toward becoming an economic powerhouse. One might think it would be required to pay as much as Britain or France do now or what Taiwan used to contribute – about 6% -- when the Republic of China held the China seat in the U.N.

Tuesday, July 12, 2005

Enough is Enough

The South Korean government has withdrawn its financial support for an influential Washington D.C.-based policy institute to show its displeasure over a series of articles about the North Korean nuclear weapons situation that it published in the summer issue of its magazine, The American Enterprise, published by the American Enterprise Institute (AEI).

“Nip it Now,” reads the cover line of the July-August issue with the picture of a huge nuclear explosion. The subheading reads, “Averting a Nightmare in North Korea.” Inside the authors lay out the case for dissolving the alliance with South Korea, stiffing China if it doesn’t pressure the North into giving up its nuclear weapons program or waging a preemptive war.

That a publication of the American Enterprise Institute should raise the issue of North Korea’s nuclear weapons program, advocate preemptive war and regime change is fairly standard neoconservative fare. What was unusual was the amount of venom that was directed at America’s presumed ally in any such endeavor, South Korea.

“The current government in Seoul is the most anti-American in the short history of the Republic of Korea,” writes Daniel Kennelly, in a provocative essay, “Time for an Amicable Divorce with South Korea.” He writes that the alliance has become a “straight-jacket” that inhibits any military action against Pyongyang.

The articles urge Washington to end the alliance with South Korea, withdraw American troops and attack North Korea. “With some luck and determination, we could have a long-awaited moment of another liberation looming over the horizon as we have had in Afghanistan and Iraq,” writes Gordon Cucullu.

In their view, the 32,000 American servicemen and supporting troops no longer serve as a defensive “trip-wire” against a North Korean invasion. They are just in the way. “The presence of these brigades allows the North to hold us hostage because the North would likely respond to any U.S. air strikes by firing thousands [sic] of missiles at our bases in the South,” writes Kenneley.

“Simply put, our troop presence in South Korea no longer deters the North. It deters us (emphasis in the original),” he writes. “Repositioning and trimming our troops in South Korea is a signal that we are preparing seriously to deal with the danger posed by the North Korean tyrant Kim Jong Il.”

The authors argue that South Korea is capable of defending itself against a conventional attack without America’s help. “The South Koreans are now grown ups fully capable of taking care of themselves.” South Korea, he writes has the resources to field a military capable of ripping North Korea’s million-man “paper tiger” to shreds. “It’s time to let the South Koreans defend themselves.”

Cucullu goes on to ask, “Could the United State join with its regional partners to get rid of an atrocious dictator and his nuclear threats once and for all?” One has to wonder, what “partners” he has in mind. Certainly none of the countries close to Korea would take part in any such adventure.

The American Enterprise is a publication of the American Enterprise Institute, a very influential Washington, D.C.-based think tank. It has provided many of the senior figures of the current Republican administration. Ironically, part of its $30 million annual budget has been underwritten for years by the Korea Foundation, a government institution in Seoul.

Foreign Minister Ban Ki-moon told a committee of the National Assembly that the Korea Foundation had ended is support for the American Enterprise Institute because of the articles. He said that South Korea had contributed about $1.4 million to the Institute’s activities since 1992. On Thursday, President Roh fired back at the hardliners himself: Under no circumstances would South Korea allow the U.S. to attack North Korea, he said.

Ironically, the articles come at a time when the Bush administration seems to be taking just the opposite tack from the course they advocate. This weekend, North Korea agreed to return to the six-party talks, now scheduled to reconvene in Beijing on July 25. Secretary of State Condoleezza Rice says that Washington offered no special enducements, but it seems that, in fact, quite a few carrots are being offered to Pyongyang.

The administration has toned down its rhetoric – no more references to “outposts of tyranny” – and agreed to contribute some food aid. At the same time, South Korea has announced that it will offer a big carrot in the form of a promise to supply the North with reliable electric power from its own power grid.

“The AEI North Korea issue is a retred of past positions by all of its authors. Nicholas Eberstadt’s call for the U.S. to “work around the Roh Moo-hyun government was first made in The Weekly Standard nine months ago and contained an implicit call for CIA support of Roh’s rivals that is softened in this article,” said Selig Harrison, author of Korean Endgame.

“The Roh government enjoys a solid base of popular support for its policies toward North Korea, and the U.S. efforts to displace it advocated by Eberstadt have n prospect of success. American interests would be served by a gradual U.S. disengagement if it would be linked with North Korean force pullbacks as part of an accommodation with Pyongyang. Regrettably, the Pentagon has redeployed U.S. forces as part of a posture of confrontation.”

(A thanks to James Na at Guns and Butter Blog ( for the tip on this story.)

Monday, July 04, 2005

That's My Car


I wish I had been at the annual “Toyotafest” held in the shadow of the Queen Mary. Every kind of model that Toyota produced since the 1960s was on hand -- Toyota Crowns, Land Cruisers, Celicas, MR2s, Supras, you name it. Toyota is unique in that it produced versions of almost all automotive categories, from sports cars and compacts to luxury vehicles.

Stuart Resor of San Diego was there proudly displaying his 1967 Toyota Corona, still going strong at 400,000 miles on the original drive train. He bought it from a man who was going to donate it to a local high school to tear apart in auto shop classes. “I offered him $150, and he accepted $125,” he recalls. Now he owns ten Toyotas. What’s so special about them? “Their uniqueness lies in their quality. That and the fact that the company has kept its distribution network going. You can still get parts for a ’67 Toyota.”

I used to own a Toyota S800 sports car that I drove around Japan in the late 1960s. It was a snarling little red two-seater that, in truth, had a lot more bark than bite. (Not that you needed a lot of power under the hood to get around Japan during that time.) I tooled around the countryside on my honeymoon. When I left Japan I gave it to my brother-in-law. Aiiiyaaa. How was I supposed to know it would become a classic?

Back in the 1960s, it took considerable imagination – not to say a copious amount of sheer faith – to believe that any Japanese or Asian automobile had the potential to become a classic. Even now some find the notion hard to accept. “The Asian classic car? It’s a stretch I must say,” says Dave Brownell, one of America’s leading authorities on collectable cars.

Nevertheless, enthusiasts on both sides of the Pacific are beginning to rediscover the pleasures of owning a car made in the 1960s and 1970s. It was a time when Japanese automobiles were first beginning to show up in large numbers in foreign showrooms. It was also a time when Japanese cars began to display the styling and performance characteristics that would soon make them into world leaders they are today.

In a small way even my own Toyota S800 was something of a pacesetter. It featured a removable roof panel, beating Porsche to the idea by about a year. If it been powered by more than its 790 cc engine, the sporty little car might have made a bigger impact outside of Japan as an alternative to, say, the Spitfire. In fact, only about 3,000 were ever made.

Of course, there are purists, who will insist that the term “classic car” hardly applies to Japanese or any other Asian makes. Strictly speaking, in the U.S. the term refers to cars made between 1925 and 1948, such as Packards, Dusenbergs and Austin 7s. Post-war cars considered to be of “near” or “almost” classic status include such legends as the Ford Mustang, the MGB, the Triumph, and, of course, the ubiquitous Volkswagen Beetle.

“It’s time the Toyota joined the ranks of the collectables,” said Resor, who founded the Toyota Owners and Restorers Club with this idea in mind ten years ago. He notes that while Japanese cars may not seem ancient in comparison with, say a 1926 Bugati, they have the basic attributes of collectability -- rarity and value. “It doesn’t have to be as old as your grandfather for you to love it.”

The Japanese Classics

1964-69 Toyota S800
1965-70 Datsun Fairlady
1965-70 Honda S800
1965-70 Toyota 2000GT
1969-75 Datsun 240Z
l971-75 Toyota Crown Coupe
1970-77 Toyota Celica Twin-cam
1970-74 Honda Z600
1971-80 Suzuki Whizzkid
1968-72 Nissan Skyline GT-R

For example, take the Toyota 2000GT (1965-1970). Only 337 copies of this elegant sports coupe were built, and only 11 Americans ever bought one. Three were exported to the United Kingdom – two to be used in the James Bond film, You Only Live Twice and the third one bought by Twiggy. Today collectors jostle to buy these cars, despite a price tag over $100,000.

Even Dave Brownell concedes that the Toyota 2000GT has a certain amount of, well, class. “It’s very collectable. I wish I had one.”

Of course, Toyotas are not the only vintage cars made in Japan. There are plenty of Nissan enthusiasts, and dealers are buying up and restoring as many of the original Datsun 240Z sports models as they can lay their hands on. And since more than 150,000 of the models were made, they are many more available than some of the other sports cars.

American dealers are hoping that that sales of reconditioned “Z classics” and “Z-vintages” will help boost the sports car market, which Nissan abandoned a few years back with the last of the famous series, the 300ZX. The Z was the first Japanese sports car to compete on equal terms with European models and helped Nissan break into the US market.

Are any other Asian cars destined to become classics? India makes the Ambassador, modeled externally on the British Morris Oxford. The original dies are used, in effect providing the buyer with a 1950s-looking car with more modern technology. As for Korean models, Brownell says he has never seen cars that get old so fast.

I’m not sure one can write such cars off so glibly. After all, who can say there isn’t at this moment some young person settling behind the wheel of his or her first Hyundai or Proton Saga or Chinese make who might not in the middle of life experience an epiphany similar to mine. It may be a spruced-up model at an automobile show, a picture in a magazine or even the sight of a rotting old hulk in a junkyard that stirs him to whisper, “that’s my car.”

This post first appeared in the Asian Wall Street Journal

Sunday, July 03, 2005

Why Not Just Nationalize Unocal?

It is very unlikely, given today’s political climate, that the China National Offshore Oil Corporation’s (CNOOC – pronounced sea-nook) bid to buy the Unocal corporation will be permitted. The deal is too sensitive, so some excuse will be found to disallow the purchase.

The California-based petroleum corporation is on the market and seemed destined for incorporation into Chevron’s growing energy empire, when the state-owned CNOOC, China’s third-largest petroleum company, suddenly entered the picture by topping Chevron’s offer of $16.4 billion by 10 per cent.

The offer came on the heels of the Haier’s announcement that it wants to acquire the Maytag Corp (see post below). Not even the most avid China basher would argue that a washing machine maker is a threat to national security. But coming so close together the acquisition attempts contribute to the growing anxiety in America that China wants to buy up the country.

Not surprisingly, members of Congress are agitated. On Thursday Rep. Richard Pombo (R-Calif.) introduced a resolution stating that, “the U.S. increasingly needs to view meeting the energy requirements within the context of our foreign policy, national security and economic security agenda. This is especially the case with China.”

The same week, in an unrelated matter, the House voted 313-114 to block the U.S. Export-Import Bank from underwriting a $5 billion loan to the China state nuclear power corporation so that it can buy reactors and steam generators from the Westinghouse Corporation, a shoot-yourself-in-the foot action if there ever was one.

Yet for all the fuss and bother it has raised in Washington, it is far from clear that CNOOC can prevail even in a straight commercial fight with Chevron. Some argue that the playing field is tilted in China’s favor because, being a subsidiary of a state-owned corporation (70% equity owned by the Chinese government), CNOOC has unlimited deep pockets.

But in a bidding war, CNOOC would be seriously outmatched by Chevron, which has pretty deep pockets of its own. Chevron’s total market capitalization of about $115 billion and cash reserves are five times that of its Chinese rival. To pull this deal off CNOOC would have to borrow about $15 billion. Its debt-to-earnings ratio would shoot through the roof. Indeed, several international credit agencies have already lowered the Chinese company’s credit ratings in anticipation.

That’s one reason why some analysts in Asia look on the CNOOC’s bid as foolish to the point of recklessness. “You have to wonder why CNMOOC is banging its head against the wall,” says Foo Choy Peng at UOB Kay Hian Securities in Hong Kong. He doubts the sale will pass muster with regulators.

Two years ago CNOOC failed in an attempt to buy a stake in the $7.4 billion Caspian Sea Kashagan oil field, despite being teamed up with Sinopec, China’s second-ranked oil company. Ultimately, their effort was rebuffed when Exxon Mobil and Conoco Philips upped their bids. One would not be surprised to see something like that happened with Unocal.

Nevertheless CNOOC persists, and it is easy to see why. Unocal’s reserves, mostly in the form of natural gas, are mainly concentrated beneath waters off of Vietnam, Indonesia and Myanmar. They would increase the Chinese company’s total reserves by a significant amount and feed its new refineries along China’s southern coast.

On Friday the company took an unusual step of directly asking the Treasury Department’s Committee on Foreign Investments in the United States to scrutinize their project expeditiously. They are hoping to put that inevitable review behind them before Unocal’s board of directors acts on the Chevron bid. It is scheduled to meet to discuss the deal on August 10.

If the issues involve national security, foreign policy and energy independence, why doesn’t the Congress take the next logical step and consider having the U.S. government buy a controlling interest in Unocal itself? In other words, nationalize Unocal. That way the country would have ultimate control over Unocal’s resource base.

Of course, most Americans would be aghast at this violation of free market principles. Yet these same people opposing nationalization think there is nothing wrong about the government interfering to stop what is basically a straight-forward commercial transaction on exaggerated concerns about national security.