MNCs in the News-2017-05-12

China

Felix Hufeld, the President of Germany’s “top market watchdog” BaFin, said at the regulator’s annual press conference that “China is welcome to invest in German financial firms.” He stated in conjunction with HNA Group’s increase of its state in Deutsche Bank that “‘we believe it is fundamentally positive capital is being invested in German banks. This.. includes foreign capital and of course Chinese capital.” He added, “‘there is no black list of countries that are not allowed to invest with us’” (Tom Sims, Andreas Korener, and John O’Donnell, “Germany Welcomes Chinese Investment in Financial Firms,” Reuters, May 9, 2017, http://www.reuters.com/article/us-bafin-regulation-china-idUSKBN18520W)

Japan

Taro Aso, Japan’s Deputy Prime Minister and Xiao Jie, China’s Finance Minister, recently met on the sidelines of the Asian Development Bank (ADB)’s annual meeting together with central bank representatives from both countries to discuss “the bad loan situation in China and bilateral cooperation in Asia.” Tokyo is concerned that Beijing’s economic problems could spill over to Japan. Tokyo, a major foreign direct investor in China, faces competition from Beijing, as it “increasingly challenges Japan's position in Asia,” with various regional infrastructure projects (Mitsuru Obe, “Japan and China discuss economic ties and cooperation,” Nikkei Asia Review, May 7, 2017, http://asia.nikkei.com/Politics-Economy/International-Relations/Japan-an...)

During a recent investor’s roundtable in Tokyo, India’s Financial Minister Arun Jaitley invited Japanese companies including Suzuki Motor Corporation, Toshiba, Denso, and Japanese financial institutions to engage in the “Make in India” initiative, to boost investment in India. Tokyo already established a “Make in India” fund endowed with USD $13 billion. For its part, New Delhi pledged to create “a special package of incentives for attracting investments in Japanese industrial townships,” as Japan’s automobile companies are expanding their manufacturing capacities in India (“Jaitley meets Japanese businessmen, including Osamu Suzuki, pushes for ‘Make in India,’” Hindustan Times, May 9, 2017, http://www.hindustantimes.com/business-news/jaitley-meets-japanese-busin...)

Korea

South Korean steel multinationals, POSCO and SeAH Steel, have joined the growing list of Korean multinationals joining the American Chamber of Commerce in Korea (AMCHAM Korea) following growing United States (US) protectionist measures. Anti-dumping allegations, countervailing duties, and threats of rising tariff rates from the US government have caused South Korean companies to turn to AMCHAM Korea to learn about changing American policies, voice concerns over protectionist policies, and promote the benefits of US-Korean trade. Late last year, Hyundai Motor rejoined the business network it had left (Park Jae-hyuk, “More Korean firms join AMCHAM,” Korean Times, May 7, 2017, http://www.koreatimes.co.kr/www/tech/2017/05/693_228900.html)

Malaysia

Mohamed Khaled Nordin, the Chief Minister of the Malaysian state of Johor, told the Johor Assembly that the federal government’s support had increased Johor’s position as a foreign direct investment (FDI) destination. Besides federal government’s support, good infrastructure and Malaysia’s political stability enhanced Johor’s attractiveness to foreign direct investors. The state recorded foreign investments worth USD $10.2 billion for the 2012-2016 period, including a high profile USD $6.9 billion investment from Saudi Arabia’s oil company Saudi Aramco (“Johor attributes federal govt’s support to surging foreign direct investments,” Free Malaysia Mail Online, May 7, 2017, http://www.themalaymailonline.com/malaysia/article/johor-attributes-fede...)

The recent failure of a deal between China Railway Engineering Corp and Malaysia’s Iskandar Waterfront Holdings that was supposed to “exorcise demons of the 1 Malaysia Development Berhad scandal” has “fuelled speculation” over Chinese investments in the country and complicates Malaysia’s Prime Minister Najib Razak recent trip to the One Belt One Road summit in Beijing. Commentators asked Malaysia for “a clear explanation” before it “erodes” other investors’ confidence in the South East Asian country (Ushar, Daniele. "Bandar Malaysia woes cast shadow on Najib’s trip to Beijing," South China Morning Post, May 8, 2017, http://www.scmp.com/week-asia/geopolitics/article/2093469/bandar-malaysi...)

Vietnam

Four Taiwanese companies, Formosa Plastics, Formosa Chemicals & Fibre, Formosa Petrochemical, and Nan Ya Plastics Corp., are accelerating investments in the biggest integrated steel mill project in Southeast Asia. The plant, with a total investment cost of USD $11.03 billion, is expected to begin operation following an investigation from Vietnam’s Ministry of Natural Resources and Environment. The investigation aims to correct the violations identified following a toxic oil spill which resulted in around USD $500 million of costs to project investors (“Formosa to pour additional $1bn into steel project,” Vietnamnet, May 7, 2017, http://english.vietnamnet.vn/fms/business/177906/formosa-to-pour-additio...)

Vietnam’s Prime Minister, along with governmental ministries and private business leaders, met with a delegation from the Trade Development Council of Hong Kong to promote various infrastructure investment opportunities in Vietnam. The Vietnamese government is in the process of market reform to better align the country with the requirements of the global economy and is looking for foreign investment in infrastructure to boost its competitiveness. The purpose of hosting the Hong Kong delegation was to explore relations and work with Vietnamese ministries and agencies to identify potential investment projects (“PM welcomes Hong Kong firms to Viet Nam,” Bizhub, May 11, 2017, http://bizhub.vn/news/pm-welcomes-hong-kong-firms-to-viet-nam_286078.html)

*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.