China is heavily restricting domestic news coverage of Cnooc Ltd.'s failed bid to buy an American oil company, apparently to muffle criticism of the United States before next month's summit meeting between Chinese President Hu Jintao and President Bush.
Editors at Chinese newspapers, Web sites and a television station said they were obeying a recent central government directive to publish or broadcast only official Xinhua news agency accounts of the bid. The Propaganda Department of the ruling Communist Party issued the guidelines more than two weeks ago, after it became clear that Cnooc's $18.5 billion offer to buy Unocal Corp. was faltering amid opposition in the U.S. Congress.
"We are not allowed to do our own reporting anymore" on Cnooc, said an editor at a major newspaper published by the Wenxin United Press Group. "This is a ban."
Cnooc, China's largest offshore-oil producer, on Tuesday abandoned a months-long effort to buy Unocal, of El Segundo, Calif., blaming the political atmosphere in Washington. Thus far, the Chinese government has refrained from commenting on the collapsed bid -- which would have been the largest Chinese acquisition of a U.S. company -- to distance itself from Cnooc and deflect allegations in Congress that the drive to buy Unocal reflected Chinese state policy.
"This is a commercial matter," said a Chinese Ministry of Commerce spokesman when asked to comment on the failed bid. "As a government department, there is no need to make any comment about this at this time."
But analysts and editors say Beijing has been closely involved in managing the media coverage that has followed. The goal is to contain combustible anti-American sentiment in China that Cnooc's failure might ignite, they say.
"I think the Propaganda Department is trying to cool down the nationalist anger caused by this," said Li Xiguang, who teaches journalism at Tsinghua University in Beijing. "The government wants to have strong ties with the U.S. despite this setback."
Popular dissatisfaction with Washington runs high in China, fueled by American support for Taiwan and perceived U.S. bullying on trade matters. Many Chinese also expressed resentment at the recent revaluation of the country's currency as the latest indication that the United States is trying to push China around.
Bush administration officials had criticized the yuan's peg to the U.S. dollar, which they said undervalued the Chinese currency and gave its exports an unfair competitive advantage.
But the leadership in Beijing, which is now hosting six-nation negotiations, including the United States, on North Korea's nuclear weapons program, and preparing for the U.S.-China presidential summit in the United States in September, is intent on keeping relations with Washington as smooth as possible.
For a few weeks after Cnooc's announcement in June that it was challenging U.S.-based Chevron Corp. to acquire Unocal, coverage in China's state-owned media was relatively freewheeling, with some commentaries criticizing the bid as overly ambitious, and others attacking efforts by American legislators to block Cnooc.
But as it became clearer that Unocal would side with Chevron, despite Cnooc's substantially higher bid, the Propaganda Department issued its directive to newsrooms across China. A staff member of the Shanghai Oriental Morning Post said editors were called into a meeting where their boss informed them of the directive.
"All reports on Cnooc should use stories from Xinhua news agency in order to keep the same tone as the government," the staffer quoted the boss as saying. Editors at four other newspapers and a Shanghai television station contacted by the Wall Street Journal described similar scenes at their offices.
Beijing's desire for smooth U.S. relations notwithstanding, the Cnooc saga could still cause repercussions for American interests. The handful of permitted commentaries published in recent days have emphasized U.S. hypocrisy on free trade. The China Daily, the official English-language newspaper aimed predominantly at foreign readers, ran an editorial Thursday saying the consequences of the failed Cnooc bid "may be more serious than some U.S. politicians have calculated."
Ellen Zhu and Cui Rong contributed to this report.
Cnooc Chairman Fu Chengyu reportedly was surprised by U.S. reaction to the bid for Unocal.