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Oil company buys a Canadian company they will pay fifteen billion dollars for that.
Is this because we would never let them buy one of our oil and gas companies here in America probably.
Gordon Chang is -- this he's the author of the coming collapse of China he joins -- -- I go and welcome back.
Thanks Stuart are right in saying that if China wanted to buy a one on our oil and gas company is for fifteen billion we would say -- -- -- gonna give away our energy assets -- Well I think that we would make it difficult for them it really depends on what the company has and then all the circumstances.
You know the problem with the Unocal deal which is where we did block -- felt it was was really because they were getting government subsidized finance and this was a politically directed deal and -- were all sorts of complications and so it's a little bit.
We wanted to keep China out of the gas patch in America that's what we wanted to do business but I was kind of nationalism approach approach trying.
But there was some good reasons to do with those -- but -- -- and Canada -- -- gonna do that that a welcome fifteen billion dollars with -- on something -- short because -- paying a 60% premium to market.
-- -- the inquirer was actually punished in the Chinese and Hong Kong stock markets.
Because investors thought that the premium was much too large you know countries that don't believe in the spot market China doesn't believe in the spot market.
Almost always get punished and I think that's what we're going to see here.
Novo won't won't won't get punished why did because they're paying much too much for the oil they're buying you think.
Oh I think so you know -- we've seen this with regard to the Japanese we've seen it with regard to the Chinese paying much too much deadlocked in a reliable supply I mean isn't that -- something.
A very little specially if the price of oil is going to decline as it has been recently know essentially what you've got isn't.
That countries like this.
Really believe that they have to own everything.
But there's a large liquid spot market for oil and that's where China could get so you think that -- the Chinese company is wrong -- off of this prize for -- Canadian company it's -- bad business decision and you -- possible is gonna go down some more in the future if you look at the global economy what's happening in Europe what's happening in Asia.
And of course what's happening here you don't see a vibrant group global economy -- you think China's need for oil is gonna come down.
Well it already is because in June it is the demand for oil declined by one point 7%.
Mean by the way that they may not be buying that oil that debt would otherwise be going through the Keystone Pipeline because our fear was that because -- the hold up to keystone.
-- the Chinese would take all the Canadian oil -- less likely to happen I think it's much less likely for a number of reasons first of -- the Canadians have a lot of environmental issues and all sorts of things but the more important things that China doesn't have the demand its economy right now is flat lining.
-- and while it may be able to stimulate some -- and they -- -- -- -- That's not what they say yeah but you look electricity production which historically -- is the growth of the economy.
In June electricity production in China declined zero point 8% in May it was up.
Only two point 7% April was up only zero point 7% -- that really means that China can't be growing more than zero on the evolutionary -- will they ever admit it.
Eventually they will have to admit it and because you know it's just becoming obvious with the copper and that iron -- and the cold being stockpiled.
You know in parking lots and gray areas it's just obvious that the Chinese economy is going through a very difficult patch they're not gonna need all this -- Gordon Chang thank you very much indeed went well I know you've said this before but you -- say it again because it's very interesting so -- -- -- and.
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