WASHINGTON, July 1 (UPI) -- A Beijing government media outlet said Friday if Washington permits a Chinese firm to buy Unocal Corp. it will ease the need to revalue China's currency.
The statement from Xinhua, China's main government-run news agency, came as political pressure in Washington mounted against China National Offshore Oil Co.'s effort to buy Unocal, which already has an agreement to be acquired by U.S. oil giant Chevron Corp.
"If (Cnooc) successfully merges with the U.S. oil company Unocal, the astronomical sum of loans in U.S. dollars used by Cnooc will alleviate the pressure on Chinese yuan's appreciation, observers said in Beijing Thursday," Xinhua said.
Citing analysts, Xinhua said Cnooc loans in U.S. dollars from Chinese lenders would "result in the abatement of $13 billion" in China's foreign exchange reserve.
"In some sense," said the statement, "this means the alleviation of current pressure demanding for the Chinese yuan's appreciation."
Xinhua's statement appeared designed to offset national security worries about the Unocal deal with concerns about the United States' huge balance of trade deficit with China, sometimes blamed on Beijing's decision to hold down the value of its currency, analysts said.
