MNCs in the News-2014-04-11

Strikes continue at Walmart’s store in Changde (Hunan, China) despite the end of strikes at closed Walmart stores elsewhere. Workers have been striking for higher severance compensation following the closure of stores, which relate to Walmart’s restructuring of its China’s operations. Observers say that the efforts of one Walmart worker, Huang Xingguo, who also heads the store’s All China Federal of Trade Unions (ACFTU)’s chapter, have been critical to the strike’s persistence. Commentators note that the ACFTU chapter’s activism is atypical, though it is not necessarily supported by the ACFTU’s municipal chapter or by city officials with other economic portfolios (Tom Mitchell, “Union Star Rises from Walmart China Labour Dispute,” Financial Times, April 7, 2014).

Earlier this week, it was announced Japanese pharmaceutical company Daiichi Sankyo would sell its stake in Ranbaxy, an Indian drugs company, to Sun Pharmaceutical Industries (India). Daiichi originally purchased Ranbaxy in 2008 to profit from the latter’s sales channels and strengths in generic drugs. Soon after the deal was announced, however, it became apparent that Ranbaxy had significant quality control problems, which resulted in the US Food and Drug Administration imposing import bans on all Ranbaxy plants in Indian and fining Ranbaxy millions. Daiichi, which lost billions on its investment in Ranbaxy, observed “it had learned a lot of things” (“India’s Sun Pharma Buys Troubled Rival Ranbaxy for $3.2bn,” Times of Oman, April 7, 2014, http://www.timesofoman.com/News/32119/Article-India%E2%80%99s-Sun-Pharma...$3%202-bn)

Citing increasingly strict rules on tobacco products, Philip Morris International will relocate all its Australian cigarette production to Korea, where regulations are looser and a large segment of society still is receptive to smoking. Australia’s latest safety requirements and regulation, which ban logos and colors from cigarette packs, will end 60 years of Philip Morris operations in Australia. Industry insiders predict that if this transition to South Korea goes well, it will make it a global hub for tobacco manufacturing, adding to the 40 billion cigarettes per year already produced at the company’s Yangsan plant (Oh Kyu-wook, “Philip Morris to relocate Australian facility to Korea,” The Korea Herald, April 10, 2014, http://www.koreaherald.com/view.php?ud=20140407001258)

China Airlines Ltd (CAL), Taiwan's largest carrier, has joined with other travel industry groups to call on mainland China to lift its ban on Chinese citizens changing planes in Taiwan, with passengers still not permitted to head to a third destination from the island. CAL is pushing to have this issue included in this week’s Boao Forum for Asia (Hainan, China), where former Taiwan vice president Vincent Siew, honorary chairman of the Taiwan Cross-Straits Common Market Foundation, will meet with Chinese Premiere Li Keqiang to discuss trade relations, regional economic integration initiatives, and other matters (“Airlines, industry urge end to ban on Chinese layovers,” Taipei Times, April 7, 2014, http://www.taipeitimes.com/News/biz/archives/2014/04/07/2003587435)

During a recent visit to Shandong province, Singapore’s Emeritus Senior Minister Goh Chok Tong urged Singapore companies to invest more in the Chinese province of Shandong. He says that Shandong and Singapore have a mutually-beneficial relationship: Singapore is a capital-surplus country looking for new investment locations while Shandong is pushing to improve per-capita GDP and attract investments. Goh added that Shandong has a sound fiscal environment and a higher predictability of policy implementation. The Singapore-Shandong Business Council, co-chaired by Singapore’s Minister of State for Trade and Industry, has helped spur broad-based cooperation and an expansion of investments across the province (Linette Lim, “Singapore companies urged to invest in Shandong province,” Channel News Asia, April 11, 2014 http://www.channelnewsasia.com/news/singapore/s-pore-companies-urged-to/...)