Here is an excerpt from Billmon’s post today on the China syndrome:

But there really are some things that money can’t buy, and a group
of congressmen in the grips of a xenophobic frenzy is one of them. When
the House passed a nonbinding resolution last Thursday accusing Cnooc
of being a front for the evil Dr. Fu Manchu (well, not in so many
words, but that was the gist) it was by a vote of 398 to 15 — proving
that when it comes to pandering to fear and paranoia, bipartisanship
still lives.

Regular readers know I’m no fan of the state capitalists
in power in Beijing. But the anti-Chinese rhetoric now filling the
Capitol dome with hot air doesn’t have anything to do with anything
that matters — at least, not to anyone who isn’t a Chevron or Unocal
shareholder.

The number of American jobs conceivably at risk in the Unocal deal
is trivial. Blocking it wouldn’t stop the flood of sweatshop and/or
slaveshop goods entering the United States. It wouldn’t free Tibet, or
force Beijing to lift a finger to respect the U.N. Declaration of Human
Rights. And it wouldn’t do squat to resolve the huge and growing
financial imbalances created by China’s stubborn insistence on pegging
its currency to the dollar. It could even make them more dangerous — as we shall see.

It’s completely insane (or utterly craven, or both) to obsess over
the $18.5 billion purchase of a second-tier oil company, when China is
buying up roughly that same amount in U.S. Treasury and agency
securities every quarter. China’s stockpile
of Treasuries ($235 billion at the end of April) already equals almost
12% of all U.S. debt in foreign hands, and is growing nearly twice as
fast as the global total. And that’s using the Treasury’s own figures, which probably undercount.
Add in securities held through third parties, such as offshore banks,
and China could easily be holding close to $300 billion in America’s
national debt — second only to Japan. And unlike Japan, nearly all of
China’s Treasury holdings are in the hands of the Chinese government.

If the dipsticks in Congress really had national security
threats on their minds, they’d probably be worrying about that one –
not the risk that ownership of Unocal might allow China to tamper with
the U.S. oil supply in time of war. If that nightmarish scenario ever
were to unfold, the problem of seizing and securing Unocal’s
energy-producing assets would be trivial compared to the havoc that war
would create in the global financial markets and the U.S. economy.

Go read the whole thing.