MNCs in the News-2016-05-20

Recently, a committee linked to the Cyberspace Administration of China that includes members linked to the Chinese military and security agencies has been “quietly scrutinizing technology products sold in China by…other big foreign companies” to determine if they “pose potential security threats to the country and its consumers.” The committee seems to be examining “encryption and the data storage of tech products.” Security reviews are not unusual, but reviews of products sold to the general public are. The reviews seem to target hardware, software, and popular gadgets and some fear the reviews may be used to steal sensitive technological knowledge (Paul Mozur and Jane Perlez, “China Quietly Targets U.S. Tech Companies in Security Reviews,” The New York Times, May 16, 2016, http://www.nytimes.com/2016/05/17/technology/china-quietly-targets-us-te...)

The head of China’s Ministry of Industry and Information Technology met with Apple CEO Tim Cook and stated he hoped “‘Apple can expand its business in China, deepen its cooperation in research and development and industrial supply chains, and provide a convenient and secure user experience for Chinese consumers.’” Many see Cook as trying to woo China after Apple lost a trademark dispute and was forced to close its iBooks and iTunes movie stores. The visit followed Apple’s USD $1 billion investment in Didi Chuxing, which was universally seen as a gesture to buy goodwill, though it has business benefits (Paul Mozur and Mike Isaac, “Apple’s $1 Billion Investment May Ease Ties with China,” The New York Times, May 13, 2016, http://www.nytimes.com/2016/05/14/technology/apple-uber-didi-chuxing.html; http://www.reuters.com/article/us-apple-china-idUSKCN0Y70R2; Paul Cartsen, “Apple’s Cook Visits Beijing after china Woes, Didi Deal,” Reuters, May 16, 2016, Paul Carsten, “In Meeting with Apple’s Cook, China Regulator Stresses Security,” Reuters, May 19, 2016, http://www.reuters.com/article/us-apple-china-idUSKCN0YA0YP)

Beijing Automotive Industry Holding Co. (BAIC) plans to build three global manufacturing centers, some of which will be joint ventures with government and other partners, and others just focus on original equipment manufacturer activities, in Mexico, South Africa, and China’s Yunnan province and more than 100 after-sales service centers in places like Eastern Europe, Central Asia, and North Africa. It also will “deploy more resources in markets that are part of the Belt and Road Initiative.” All of this is part of BAIC’s plan to enhance its brand image, bolster its competitiveness, and tap into different sales and service opportunities (“BAIC Speeds Up to Overtake Foreign Rivals,” China.org.cn, May 23, 2016, http://www.china.org.cn/business/2016-05/23/content_38511662.htm)

Korea’s Ministry of Environment has launched an investigation into 20 models of diesel cars sold in South Korea. It said Nissan had “used a so-called defeat device that helps [its Qashqai SUV] emission management system turn off during regular driving conditions” and thus produced deceptive emissions data. It said it planned to fine Nissan about USD $300,000 and would order a recall of Qashqai SUVs. Qashqai purchasers plan to file a class-action lawsuit against Nissan Korea Co. and will ask for full returns of their purchase price plus compensation for damage. Nissan Korea denied illegal behavior and using defeat devices (“South Korea Says Nissan Manipulated Emissions, Plans Fine and Recall,” Nikkei Asian Review, May 16, 2016, http://asia.nikkei.com/Business/Companies/South-Korea-says-Nissan-manipu... Jung Min-hee, “Nissan Qashqai Model Owners to File Class-action Lawsuit Against Nissan Korea,” Business Korea, May 18, 2016, http://www.businesskorea.co.kr/english/news/industry/14715-nissan-scanda...)

Korean CJ Group Chairman Sohn Kyung-Shik met with Indonesian President Joko Widodo in Seoul. Senior managers of CJ Group as well as top Indonesian officials including Indonesia’s Foreign Minister, Coordinating Minister for Economic Affairs, Trade Minister, Creative Economy Agency Head, and the Indonesian Ambassador to Korea joined the meeting. Before the meeting, Widodo visited the Culture Creative Convergence Center and production facilities in CJ’s E&M Center. CJ Group Chairman Sohn said Indonesia is a country where CJ Group has launched key businesses and his firm would “make an effort to mutually grow with Indonesian government agencies and local partner firms” (Marie Kim, “CJ Group Chairman Sohn Meets Indonesian President Joko Widodo,” Business Korea, May18, 2016, http://www.businesskorea.co.kr/english/news/industry/14716-cj’s-culture-diplomacy-cj-group-chairman-sohn-meets-indonesian-president-joko)

At a forum, Indonesia’s President Joko “Jokowi” Widodo welcomed investors from South Korea to invest more in Indonesia. He told attending businesspeople his government would work unceasingly to improve the country’s investment climate. He said, “‘I will continue reform. I will continue to simplify licensing. I will make the Indonesian economy more open.’” He touted Indonesia’s infrastructure projects--ports, toll roads, railways, irrigation system, and dams--that were underway. He also stressed the policies his government had adopted to open Indonesia to foreign investment, highlighting 12 economic packages designed to “‘facilitate faster port clearance, lower electricity costs’” and so on (Ayomi Amindoni, “Jokowi vows better investment climate to S. Korean investors,” The Jakarta Post, May 16, 2016, http://www.thejakartapost.com/news/2016/05/16/jokowi-vows-better-investm... )

Indonesia’s Energy and Mineral Resources Minister Sudirman Said and the US Ambassador to Indonesia Robert O. Blake held a discussion during which 24 US companies expressed their interest in investing in Indonesia’s energy sector. Sudirman commented that the Indonesian government will later move to discussing partnership opportunities (the type being flexible) including potential challenges. Indonesia welcomed US companies to invest in the nation’s infrastructure, energy industry, and real estate sector. Sudirman offered US businesses many investment opportunities including bidding on independent power producer (IPP) tenders for Indonesia’s 35 GW megaproject. In the electricity sector, there also are opportunities in bioenergy (Miftah Ardhian, “24 US Companies Eye Indonesian Energy Sector,” Katadata News, May 20, 2016, http://en.katadata.co.id/news/2016/05/20/24-us-companies-eye-indonesian-...)

In March, after Thailand and China failed to settle their differences pertaining to loan conditions for the Bangkok-Nakhon Ratchasima high-speed rail project, the Thai government decided to unilaterally fund a scaled-down version of the original Thai-Chinese double-track railway project. Nevertheless, the two countries still have disagreements over project costs with China estimating 190 billion baht and Thailand noting a figure of 170 billion baht. Thai negotiators have suggested Chinese officials reduce their figure and anticipate that China eo;; come out with new figures in a week. Both countries agree to speed up railway construction by dividing it into several sections (Amornrat Mahitthirook, “Rail Project Cost Nears Agreement,” Bangkok Post, May 14, 2016, http://www.bangkokpost.com/business/news/972121/rail-project-cost-nears-...)

Uber Technologies, the (US) San Francisco-based maker of the ride-sharing mobile app, has been in the Thai market for two years, but the service still remains illegal in the country. Chan Park, Uber’s general manager for Southeast Asia, said his firm “‘wants to be regulated by the Thai government as it intends to continue operating in Thailand.’” Uber wants Thai authorities to legalize its service in Thailand for the benefit of consumers. Uber has spoken with local regulators and feels the first stage of negotiations went well. Thai officials recognize Uber might help “relieve traffic congestion and expand public transport” (Suchit Leesa-nguansuk, “Make US Legal, Pleads Uber,” Bangkok Post, May 17, 2016, http://www.bangkokpost.com/business/news/975773/make-us-legal-pleads-uber)

According to Vietnam’s Foreign Investment Agency (FIA), Singaporean investors have invested in 1,600 projects in Vietnam, which have a total value of US $36.3 billion as of April 2016. Singapore ranks third among 114 countries and territories investing in Vietnam. From January to April, Singaporean firms invested in 50 new projects and raised investment in 23 existing ones. The processing and manufacturing sector is the most attractive one to Singaporean investors and constitutes 44.3 percent of their total investment in Vietnam. Singaporean firms have spread their investment to other cities beyond major localities like Ho Chi Minh City and Hanoi (“Singapore ranks third for foreign investment in VN,” Vietnam News, May 14, 2016, http://vietnamnews.vn/economy/296756/singapore-ranks-third-for-foreign-i...)

The Vietnamese State Capital Investment Corporation (SCIC) and the Russian Direct Investment Fund (RDIF) signed a memorandum of understanding (MOU) to establish a Russian-Vietnamese investment platform. The two countries will invest US $250 million each in the platform. Currently, investment cooperation between the two countries is mainly in energy. However, there are huge opportunities for the two countries to work together in more reas and the platform is aimed at leveraging those opportunities. The RDIF and SCIC both serve as investment arms of their governments and the MOU will enable them to identify and realize potential investments for mutual benefit (“Vietnam, Russia establish US$500 million investment fund,” Vietnam Net, May 18, 2016, http://english.vietnamnet.vn/fms/business/156669/vietnam-russia-establis... )