U.S. Markets closed

What the Chinese think about Exxon's Rex Tillerson

Andy Serwer
Editor in Chief
Rex Tillerson shakes hands with China National Offshore Oil Corp. chairman Fu Chengyu. Credit: REUTERS/Susana Vera

BEIJING, China — ExxonMobil CEO Rex Tillerson’s expected nomination as the next US secretary of state is perplexing some informed business people in Beijing.

The questions take two different tracks. The first relates to Tillerson’s experience. “Is he qualified?” asked an executive in the banking industry. “It looks like Trump is filing up his Cabinet with people with no government experience.”

When I noted that this was not lost on Trump and was in fact part of his strategy, the banking executive responded: “Well, who knows if that will work.” (Because these individuals had not been authorized to speak by their companies, they requested their names not be used.)

“He has experience running and representing Exxon all over the globe, sure, but that’s not the same as representing America,” the banker said.

The second line of questioning pertains to Tillerson and his and Exxon’s (XOM) relationship to Russia and Vladimir Putin.

Rex Tillerson meets with Vladmir Putin

“Oh yes, he has experience with Putin,” a Chinese oil company executive told me. Meaning what? “He’s been working with the Russians since the 1990s on their big oil and gas [Sakhalin] field. Everyone knows he is close to Putin.”

This executive wondered if this was a message not only to Russia, but also to the Chinese. “For sure it means Russia and America will be close. Does this mean China is out? They [the new administration in Washington] may find out these relationships [between China, Russia and U.S.] are more complicated than they think.”

“It is like strongman to strongman with [Tillerson] and Putin,” says another Chinese executive who works for a giant multinational oil company. “He [Tillerson] was focused on execution and cost management as CEO. This is different from his new job. So now we have strongman management of international affairs.”

These oil execs also point out that ExxonMobil does business in China.

According to the company website: “ExxonMobil’s history in China dates back to the 1890s, when Standard Oil, the predecessor of ExxonMobil, began marketing kerosene in China.”

Today the company has significant operations in China including exploration, gas and fuels marketing, lubricants sales and services, chemicals and power generation, including a $4.5 billion refining and petrochemical complex in Fujian Province. The Wall Street Journal reported the company was planning on opening 750 gas stations in China, even as it was selling company-owned stations in the US.

The company has some 1300 employees in China, 300 of which are in Hong Kong, the rest on the Mainland.

If Tillerson is named and confirmed as secretary of state, the Chinese will be paying attention, particularly when it comes to his relationship with Russia. His then-former company’s operations in China will be on their radar, too.

Andy Serwer is editor-in-chief of Yahoo Finance.

See also:

How entrepreneurs are bridging the gap between the world’s two internets

What people in China think of Donald Trump

A letter to President Trump