JAMES WOOLSEY, FMR. CIA DIRECTOR: "For anyone who believes that this is purely a commercial undertaking, unrelated to a national strategy of domination of energy markets and of the western Pacific, I would suggest that view is extraordinarily naive."

FRANK GAFFNEY, CENTER FOR SECURITY POLICY: "The object of China's strategy is inexorably to supplant the United States as the world's premier economic power, and if necessary, to defeat us militarily. We have American businesses convinced that shilling for Beijing will improve their prospects for a piece of the ever-elusive China market."

RICHARD D'AMATO, U.S.-CHINA COMMISSION: "It makes no rational sense to help China soak up more and more supply, pushing us toward an earlier energy train wreck in the foreseeable future."

REP. DUNCAN HUNTER (R), CHAIRMAN, HOUSE ARMED SERVICES COMMITTEE: "This acquisition of this major oil company by the Chinese is a strategic acquisition, just like the acquisition by the Chinese of these Sovremenny-class missile cruisers that they purchased from the Soviet Union which have one role, and that is, to kill American aircraft carriers. In this case, they are purchasing a major strategic acquisition with reserves all over the world, with production capability. And one thing you can bet about this Unocal purchase, once this is purchased by the communist Chinese government, these guys that think with stars in their eyes that somehow this is simply an economic purchase, that this is a piece of property which will be back on the market, are totally naive."

"This will never be available. The reserves that -- and the assets and the production capability and the technology of Unocal will be owned by the communist Chinese government. And I'm convinced that they'll bid whatever it takes if the United States will allow them to buy this. They'll double their bid if they have to, because they don't need to make money. They have no shareholders to satisfy. They need this, because it's a strategic acquisition. Militaries run on oil, Lou. It's a finite resource. And I think it's a dangerous thing for us to allow the sale to take place."

DOBBS: It's a finite resource, as you say, Mr. Chairman. It is also becoming a scarce resource and a dear resource with oil now above $60 a barrel. The very idea that the Bush administration, and I recognize you're an important part of the Republican House leadership, the chairman of a -- a powerful chairman of the house armed services committee.

But for this administration to basically take a libertarian Cato Institute view of hands-off and let the market work as it may, the suggestion that somehow this is free trade. And that despite the fact that the Chinese government owns 70 percent of this Chinese oil company, despite the fact that the Chinese government is putting out interest-free loans and subsidizing the deal, and despite the fact that China would never permit any foreign company to buy an energy asset or company in China, does not that boggle even your mind?

HUNTER: Well, this is going to be a tough one to swallow, Lou, if in fact we can't stop it. But we've made a recommendation, a letter signed by myself and Richard Pombo, chairman of the Interior Committee to the president, asking that this committee on foreign investment in fact review this sale, and the president does have the power to stop this sale. And he hasn't said that he's not going to do it.

So, I'm optimistic that these facts, especially the tough facts that were laid out by the former head of the CIA, Jim Woolsey, as well as the other witnesses today, that those facts will bring this administration up short. And that they will understand that this is as important a part of national security as the weapon systems that we buy. So, I'm optimistic that Republicans will turn this thing around.

DOBBS; You know, when you have a distinguished American like James Woolsey, Richard Damato, Frank Gaffney, geopolitical economic thinkers, working clearly in the national interests, testifying, it is, I think, remarkable that the administration is putting forward no one from Treasury, from Defense, from State, Commerce, from the National Security Council, to offer even a suggestion on the vision of the part of this administration for this nation's role in Asia and the way in which it will pursue political and economic and even military relationship with China in the years ahead.

HUNTER: Well clearly, there's a valley right now between Unocal and Chevron. If that sale takes place, and I understand the board is going to meet on that sale, I believe, tomorrow...

DOBBS: Correct.

HUNTER: ...if that sale takes place, then this is a moot point. But clearly we need to have a policy. And the policy should be that important strategic assets, such as the nation's oil companies, which are just as important as those precious metals, like chromium and tantalum and titanium that we make our weapons systems with, that those assets are protected under a policy that reserves them for the United States, and for American interests.

This is the time when this administration has to understand that American interests include strategic interests like oil.

DOBBS: The rare earth properties that you're referring to in California owned by Unocal, important to national defense, as you said.

At the same time, there is a very important geopolitical strategy issue here that I wonder if it troubles you, as much as it certainly does me. And that is, that if China has the temerity to, despite the utter absurdity and contradictory position that it holds, denying foreign ownership of companies in its country, denying ownership of energy assets in its country, has the temerity to demand that the United States Congress allow this deal to go forward. And with the overall $700 billion in reserves it holds in our currency, that -- is this suggesting perhaps a test? Imagine what the test would be if it had to do with Taiwan?

HUNTER: You know, Lou, I think the Chinese have been deterred from years with respect to their Taiwan policy, because of the strength of the United States Navy, and our statement in the past, the clear message to China that we consider Taiwan to be an ally.

China right now is acquiring a series of levers. One lever was this acquisition of that piece of IBM, a very important part of their computer company. Another piece is all the money that they hold right now, this massive trade surplus. And another piece would be Unocal.

When they acquire this series of levers, I think at that point, the deterrence that we have over China to keep them from crossing those straits and try to take Taiwan evaporates. I think it'll get to the point where the tough old boys in the Politburo will decide that the United States is not going to act, and doesn't have the will to act.

And I think that the Chinese -- I think that the tough leadership despises the United States. I think they look at us as being people who are selfish, who will sell anything to anybody. In fact Lenin said that we would sell a rope with which the Communist world would hang us, I think the Chinese adhere to that philosophy as well.

DOBBS: Congressman Duncan Hunter, chairman of the Armed House Services Committee. Thank you.