MNCs in the News-2017-04-28

China

China has released a plan indicating ambitions to become an “powerhouse car manufacturer in 10 years” and a major car exporter selling domestic brands in developed markets (it already sells in developing countries). Towards this end, China’s Ministry of Industry and Information Technology indicated last year China might soften its requirement foreign auto companies in China form minority joint ventures (JVs) with Chinese firms and have no more than two JV partners “making any particular type of vehicle” (An Limin and Yang Ge, “China Boosts Local Brands in Road Map for Relaxed Auto Joint-Venture Restrictions,” Caixin, April 25, 2017, http://www.caixinglobal.com/2017-04-25/101082939.html)

A report by the National Committee on U.S.-China Relations and a consultancy on Chinese outward foreign direct investment (COFDI) in the U.S. touts that COFDI in the U.S. more than tripled from USD $15 billion in 2015 to USD $46 billion in 2016 and now accounts for 140,000 jobs. In 2016, the number of Chinese owned businesses in the US hit 3,200 versus 1,900 in 2015. Chinese firms have a preference for investing in coastal areas, but COFDI can be found in other geographic areas, too (“China Investment Creates and Protects U.S. Jobs, Rhodium Says,” Bloomberg, April 25, 2017, https://www.bloomberg.com/news/articles/2017-04-25/chinese-investment-cr...)

Japan

Japanese and Russian leaders planned to sign around 20 memorandums of understanding for joint projects during a summit held late April. Tokyo hopes more diversified Japanese-Russian cooperation in areas like urban development, water and traffic infrastructure, and medicine will help fuel progress on the two country’s territorial dispute by enhancing non-energy related economic links. During the summit, Prime Minster Shinzo Abe and President Vladimir Putin hope to make progress on the agreement they made last year to develop joint projects on the disputed Kuril Islands (“Japanese tech to figure heavily in Russian projects,” Nikkei Asian Review, April 26, 2017, http://asia.nikkei.com/Politics-Economy/International-Relations/Japanese...)

Korea

In order to respond to the Trump administration’s new America First energy policy, the Korean Energy Economics Institute (KEEI) and America’s Heritage Foundation hosted a conference in Washington to discuss “better ways of cooperation” between the two countries in regard to energy development. Representatives from many US and Korean energy giants including Exxon Mobil, GE Power, Korea Gas, and SK Energy attended the event. At the conference, new US energy regulations were discussed along with potential avenues of cooperation on energy development projects (Jung Min-hee, “S. Korea, U.S. Held Conference for Cooperation in Energy Sector,” BusinessKorea, April 25, 2017, http://www.businesskorea.co.kr/english/news/industry/17942-future-energy...)

Malaysia

Malaysian rights group Perkasa has demanded public discussions on Malaysia’s foreign direct investments, especially Chinese investment, to ensure Malaysian interests. In a roundtable on Chinese investments in Malaysia a participant stated “although investments are positive, there are concerns over governance, transparency, competitiveness of the issuance of the contracts.” In addition, Perkasa requested Putrajaya to publish a white paper on the geopolitical consequences of China’s One Belt One Road initiative for “Malaysia’s labor, finance and security policies as well as the country’s sovereignty” (Yiswaree Palansamy, “Perkasa wants Putrajaya to come clean on foreign investments,” Malay Mail Online, April 22, 2017, http://www.themalaymailonline.com/malaysia/article/perkasa-wants-putraja...)

Under the Economic Transformation Program initiated by Prime Minister Najib Razak in 2010, one “key target that has flourished is medical tourism.” A researcher stated that with various private healthcare hubs in the country, the outlook for foreign investment in the healthcare sector is “very promising.” He added “FDI is streaming into Malaysian healthcare, reflecting external confidence in an economic sector bursting with potential.” The Malaysian government’s spending on the healthcare sector, which is deems essential to the economy, reached USD $5.29 billion in 2016 (“Report: How healthcare is boosting a ‘sick’ Malaysia,” April 24, 2017, Free Malaysia Today, http://www.freemalaysiatoday.com/category/nation/2017/04/24/report-how-h...)

Vietnam

South Korea’s Posco Group is awaiting approval by the Vietnamese government for a USD $2.2 billion clean coal power plant in Vietnam’s central province of Nghe An. The plant intends to use cutting edge technology to adhere to Vietnam’s recently revised Power Development Plan, which stipulates tight emissions controls and minimal environmental impact. The plant will follow a build-operate-transfer model in which ownership of the plant will be transferred to Vietnam following the end of Posco Group’s operating contract (“BOT project seek ‘clean coal’ model,” Vietnamnet, April 27, 2017, http://english.vietnamnet.vn/fms/business/177390/bot-projects-seek--clea...)

Vietnam’s largest energy firm, PetroVietnam Gas JSC (PV Gas), is engaging in a joint venture with Japan’s Mitsui Oil Exploration Co. and Thailand’s PTT Exploration and Production to construct a natural gas pipeline worth USD $1.27 billion off the coast of the Kien Giang province. The project comes amid a slight upturn in price forecasts for natural gas, PV Gas’ long term goal of constructing more gas extraction and processing units, and the Vietnamese government’s desire to be less reliant on foreign energy sources (“PV Gas and foreign partners to build $1.27bn gas pipeline,” Vietnamnet, April 27, 2017, http://english.vietnamnet.vn/fms/business/177396/pv-gas-and-foreign-part...)

*The information compiled in the MNCs in the News digest is gathered from sources believed to be reliable, but the Wong MNC Center does not guarantee their accuracy. The content of the MNCs in the News digest does not necessarily represent the view of the Wong MNC Center, its Board of Directors, or its Advisory Board, but is intended for the non-commercial use of readers in order to foster debate and discussion and to facilitate and stimulate research.