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China's state-controlled oil firm, China National Offshore Oil Corp., or CNOOC, has bowed out of the race to purchase Unocal Corp., a U.S. energy company with significant holdings in Asia, after the Chinese giant encountered heavy political opposition to its bid.

The Unocal affair highlights problems with the whole globalization argument. Rather than being the worldwide integration of economies based on the search for profit and the maximization of efficiency, globalization should be seen as describing relations between a select few countries in a select few issue areas.

CNOOC's rebuff exposes at least four fallacies of the globalization argument.

First, advocates of globalization contend that the requirements of the market and the search for profit drive important decisions, be they economic or political. Politics (defined as who gets what, when and why) should be decided by questions of economic efficiency in a globalized world.

However, CNOOC's offer of $18.5-billion (U.S.) to buy Unocal surpassed the bid of its rival, Chevron, by more than $1-billion. CNOOC was also reportedly considering increasing the value of its offer. If market forces are the key determinant, the Chinese giant should have won its bid. It didn't.

Second, the globalization thesis states that, given the increasingly important role of the market, the state will have less and less control over what occurs in an interconnected, fluid and unfettered international system. Yet the CNOOC offer for Unocal was stonewalled by the U.S. House of Representatives, which put up serious regulatory and political roadblocks to the company's bid.

So much for detaching global markets from nation states.

Third, according to the globalization argument, national-security concerns are becoming less and less salient vis-à-vis the concerns of the global system, having been trumped by concerns about market access and profit, and about environmental degradation, global pandemics and international human-rights violations.

Yet those who opposed the Chinese bid primarily cited fears over a) control of national energy resources; b) how the loss of control over energy might affect national security, and c) how the loss of this control to China, a growing rival in East Asia and around the world, will threaten U.S. security in the future.

So much for globalization outranking national security.

All of which leads to the fourth fallacy of the globalization argument. Globalization is not global. Instead, relatively equal participation in a globalized economic system is limited to a select few countries, and in a select few areas. Interdependence in economic affairs can only really be found in two regions - North America and Europe, with Japan added for good measure. Anyone not in that group may gain access from time to time, but on terms set by the club's members (for example, the matter of agricultural subsidies and the Doha Round of the World Trade Organization).

The Unocal affair shows the exclusionary power of this type of globalization. What does the other side of the coin look like?

On same day that CNOOC's bid for Unocal ended, Kinder Morgan Inc. (a U.S. energy company) agreed to purchase Terasen Inc. (formerly BC Gas, an important Canadian company with development interests in Alberta's oil sands) for $3.1-billion, with little fanfare on either side of the border or in either national capital. China isn't allowed to play the game that way. Very few others would be allowed to either.

These fallacies are not new, and have existed as long as the idea of globalization has populated academic journals and newspapers and popular debate. But it's nice to bring a concept as powerful as globalization back down to earth from time to time, exposing it for what it is - a tenuous argument that explains relations between a select few states in a few issue areas.

William Hogg is a lecturer in political studies at Bishop's University, and a member of the Research Group in International Security.