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Dr. Amitendu Palit's picture

India’s FDI Prospects and the APEC

The euphoria over the birth of the NDB (New Development Bank) at the 6th BRICS Summit overshadowed the invitation extended by Chinese President Xi Jinping to Indian Prime Minister Narendra Modi for the APEC Leaders meeting in China in November. Mr. Modi’s presence at the meeting would significantly improve India’s prospects of joining the APEC. President Xi’s invite reflects the possibility of China supporting India’s entry. This would enhance the strategic backing India enjoys from other major APEC members like Australia, Japan, Indonesia and the USA.

Dr. Scott MacDonald's picture

Corporate Rationalization and Iron Ore Miners: Tough Times

The global iron ore mining industry is undergoing a major rationalization, which emphasizes the importance of corporate flexibility in the face of changing market conditions. Iron ore industry prices have fallen from over $130 per metric ton (CFR Tianjin Port prices) at year-end 2013, hitting their lowest level ($89) in almost two years in June. Numerous analysts expect that prices will stay below $100 for the rest of 2014 and possibly 2015, as well. A major driver of this price plunge is oversupply, partially caused by the ramping up of production by the major multinational corporations (mainly Australian and Brazilian) that dominate the business.

Dr. Jean-Marc F. Blanchard's picture

Petrochemical Abuse or Libya All Over Again?

The Libya uprising in 2011 cost Chinese multinational corporations (MNCs) billions. Now, the story seems poised to repeat itself, albeit this time in Iraq where Sunni radicals belonging to the Islamic State of Iraq and Levant (ISIL) now control large portions of western and northern Iraq. While ISIL has yet to endanger Iraq’s most valuable oil fields, its onslaught still poses multiple threats to Chinese interests. These include higher oil prices, disruptions of oil shipments from Iraq (no small matter given Iraq is China’s fifth largest oil supplier), damage to multi-billion dollar investments by Chinese MNCs such as CNPC and Sinohydro, harm to Chinese nationals, and the validation of radical Islam.

Dr. Scott MacDonald's picture

Asian Corporations, Middle East Oil and New Geopolitics

The Middle East’s new geopolitics are creating a more challenging environment for Asian corporations. While Iraq’s future viability as a state is questionable due to the June battlefield successes of the Islamic State of Iraq and Syria (ISIS), more terrifying is the Sunni extremist movement’s incitement for a broader regional Sunni-Shia civil war. Add to this the potential fragmentation of Yemen and Libya and the ongoing brutish civil war in Syria and we are left to ponder - will a new round of instability spread into the major oil-producing states in the Persian Gulf?

Dr. Jean-Marc F. Blanchard's picture

Racing along a bumpy road-Automobile MNCs in China

The China car market assumed great salience in 2009 as a result of the global financial crisis, which pummeled auto demand elsewhere, Beijing’s successful use of stimulus measures to speed economic and sectoral growth, and the rapid expansion of China’s car culture. In response, many foreign firms accelerated their China investment plans, greased local relationships, and expanded the local sourcing of parts. China, now the world’s largest market, has become vital to global car companies’ sales revenues, licensing and royalty fees, and profits.

Dr. Toshiya Ozaki's picture

Japan’s “China Plus One”--Aberration Or A New Norm?

China has been at the center of business strategy for Japanese firms, which is not surprising given that China overtook the US as the largest market for Japan’s exports in 2006. The first decade of the century was dubbed “the third wave” of Japanese FDI flows to China. Even if Tokyo’s political relations with Beijing were tumultuous, companies hoped politics and economics could be separated (政冷経熱 or Cold Diplomacy, Hot Economic Relations”). A sea change now seems underway. Known in Japan as “China Plus One,” an increasing number of Japanese firms are starting to undertake measures to reduce exposure to China by rebalancing their FDI across Asia.

Dr. Jean-Marc F. Blanchard's picture

The Liability of Foreignness

Foreign firms have now found themselves confronting a challenging operating environment in Vietnam tied to violent demonstrations that involved thousands of protestors venting their displeasure with China’s deployment of an oil rig near the disputed Paracel/Xisha Islands, claimed by both China and Vietnam. Although protestors targeted “Chinese” firms, they also lashed out at plants owned or operated by firms from Hong Kong, Japan, Taiwan, Singapore, and South Korea. Indeed, factories with “any Chinese writing or names became targets of destruction.” Foreign companies suffered millions in losses from arson, looting, and vandalism, shutdowns, and damage to support facilities.

Dr. Jean-Marc F. Blanchard's picture

Heading the opposite of south

The latest issue of the “Global Investment Monitor” (No. 16), prepared by the United Nations Conference on Trade and Development (UNCTAD), re-affirms a trend that began many years ago which is that developing economies are becoming critical players in the world of outward foreign direct investment (OFDI).

Dr. Jean-Marc F. Blanchard's picture

Guilt by association

At the beginning of April, Japanese pharmaceutical giant Daiichi Sankyo dumped its multi-billion US dollar investment in India’s Ranbaxy, losing billions of its US $4.7 billion investment in this prominent Indian generics firm, not to mention lost management time. Daiichi made its original investment because it saw the deal as a way to broaden its distribution channels, to gain new products, and to tap into the Indian market. Signs were abundant soon after transaction was announced, however, that the deal might encounter serious problems.

Dr. Jean-Marc F. Blanchard's picture

A corrupt anti-corruption campaign?

After he became China’s President, Xi Jinping made fighting corruption a central part of his domestic policy agenda. In line with this, state anti-corruption organs have investigated tens of thousands of Chinese Communist Party officials and government bureaucrats and numerous high-ranking officials at the central and provincial government levels have lost their posts or party membership, or have been put in jail. Many foreign companies welcome the anti-corruption campaign in concept because it means, if it works, they do not have to offer “gifts” or find “middlemen” and that they will not be at a competitive disadvantage if home country laws, scruples, or both preclude them from providing a gift.

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*Blogs represent the views of their authors and are not necessarily endorsed by the Wong MNC Center, its Board of Directors, or its Advisory Board. They are intended for the non-commercial use of readers in order to foster debate and discussion and to facilitate and stimulate research.