MNCs in the News-2017-06-09

China

At the 5th Global CEO Roundtable Summit, Chinese Premier Li Keqiang “pledged to make doing business in China more inviting by facilitating overseas investment and widening market access.” More specifically, he stated China would work harder to protect intellectual property rights, promote wider use of negative lists, and eliminate obstacles to investment access. He added his country also would look to “create opportunities for joint exploration of third-party markets and multilateral cooperation” and encouraged foreign firms to “grow their business in step with China’s economic development” (Zhang Yue, “Li Pledges Improved Climate for Business,” China Daily, June 9, 2017, http://www.chinadaily.com.cn/bizchina/2017-06/09/content_29677286.htm)

Responding to a EU Chamber of Commerce in China (EUCCC)’s 2017 Business Confidence Survey which showed half of the EUCCC’s member companies felt less welcome in China compared to when they first entered and that half report being treating less favorably than their Chinese competitors, a China MOFCOM spokesman retorted most EU firms are showing revenue growth and are optimistic about future prospects. While China would study the survey’s recommendations, the spokesman further noted EU companies should not expect the same level of opening in China they have in Europe (“China ‘Welcomes’ Companies from Europe,” ECNS.CN, June 9, 2017, http://www.ecns.cn/business/2017/06-09/260780.shtml)

ZTE Nigeria Limited, a subsidiary of Chinese telecommunications giant ZTE, recently responded to criticisms from several Nigeria unions, including the United Labor Congress of Nigeria, that it had not only brought in an excessive number of Chinese workers, but also was paying them far more than locals. ZTE Nigeria’s head of Administration denied the firm was abusing expatriate quota limits and touted that the firm was trying to maintain hiring in a tough environment, offered good benefits, and had few foreign employees (Ben Ezeamalu, “Chinese Telecom Firms Denies Flouting Nigeria’s Expatriate Quota Limit,” Premium Times Nigeria, June 4, 2017, http://www.premiumtimesng.com/business/business-news/233032-chinese-tele...)

Japan

Japan’s Nomura Holding Inc. acquired Venezuelan state oil bonds for USD $100 million in a move which caused the opposition in Venezuela’s Congress to denounce the sale as supporting President Nicolas Maduro. Venezuela’s National Assembly will seek to overturn the deal, contending the money will be used to purchase weapons from criminal organizations and allow Maduro to maintain power and continue drug smuggling. The bond sales come at a time the government is cutting food imports to meet other debt (Corina Pons and Alexandra Ulmer, “After Goldman storm, Venezuela congress blasts Nomura bond buy,” Reuters, Thursday, June 1, 2017, http://www.reuters.com/article/us-venezuela-bonds-idUSKBN18S6GI)

Toshiba is selling its flash memory division for around USD $18 billion following losses in its nuclear energy business. An attempt to create Toshiba Memory, a subsidiary for its memory division, caused United States (US) Western Digital to file a complaint with the International Court of Arbitration. Western Digital has abandoned pursuing a majority share in its partner company’s business in favor of seeking joint ownership with Japan’s state owned Development Bank and Innovation Network Corp. Other international buyers also are interested (“Western Digital gives up on buying majority stake in Toshiba chip unit,” Japan Times, June 6, 2017, http://www.japantimes.co.jp/news/2017/06/06/business/corporate-business/...)

South Korea

South Korea’s Hyundai Motors will partner with China’s Internet provider, Baidu, to create smart cars featuring Baidu Maps integration, artificially intelligent personal assistants, and voice recognition software. The partnership aims to improve Chinese opinions toward Hyundai following the deployment of US anti-missile defense systems in South Korea, which resulted in strong retaliatory measures from both the Chinese government and Chinese citizens. This appears to be the first wave of integrated technology vehicles being marketed in China, and the two companies have strong desires for implementing future improvements (Jhoo Dong-chan, “Hyundai joins hands with Baidu,” Korea Times, June 7, 2017, http://www.koreatimes.co.kr/www/tech/2017/06/419_230799.html)

Hyundai Samho Heavy Industries has established a joint venture (JV) with Russian Zvezda Shipbuilding to provide ship design support, marketing expertise, and employee training programs. The deal was overseen by the CEO of Russia’s state owned integrated oil company, Rosneft and South Korea’s ambassador to Russia. The JV will fill orders from Russia’s state owned shipping company, Sovcomflot, for oil tankers in addition to ensuring ship building materials and machinery are adequately installed at the Bolshoi Kamen shipyard (Lee Song-hoon, “Hyundai Samho Heavy to Set up Joint Venture in Russia,” BusinessKorea, June 5, 2017, http://www.businesskorea.co.kr/english/news/industry/18282-technical-sup...)

Indonesia

Chinese Ambassador to Indonesia Xie Feng is seeking support from Indonesian Vice President Jusuf Kalla to implement the Jakarta-Bandung bullet train project. Ambassador Feng announced that relations between Indonesia and China have improved significantly during his three years term in the office, which recently finished, especially because of successful bilateral talks on the Maritime Silk Road Initiative (MSRI) initiated by China. According to Mr. Feng, the initiative has a capacity to offer new opportunities for both countries to strengthen cooperation and provide benefits for the public (“Chinese Ambassador Seeks Support from Kalla over Bullet Train,” Tempo.com, June 8, 2017, https://en.tempo.co/read/news/2017/06/08/056882792/Chinese-Ambassador-Se...)

Thailand

US President Donald Trump has invited Thai Prime Minister Prayut Chan-ocha to visit the White House in July this year. The upcoming visit signalizes the US intention to re-establish “normal diplomatic relations” with Thailand, its oldest Asian ally. Thai government spokesman Weerachon Sukondhapatipak announced that the upcoming talks are expected to cover “investment, trade, commerce and security including security issues such as human trafficking.” The US is one of the major foreign investors in Thailand, with foreign direct investment in 2015 reaching over USD $11 billion (“Prayut to visit White House in July – spokesman,” Bangkok Post, June 6, 2017, http://www.bangkokpost.com/news/politics/1263690/prayut-to-visit-white-h...)

Malaysia

The sale of a 49 percent share in a SK316 offshore gas block by Malaysian state-owned energy firm Petronas has advanced to the second round, with Royal Dutch Shell and ExxonMobil expressing their interest in the project. The sale has been “clouded by political opposition.” Responding to criticisms, Sarawak Chief Minister Abang Johari stated that since the project “cost billions of ringgit and it is of high risk” Malaysia does not want to develop the gas field itself (Anshuman Daga and Sumeet Chatterjee, “Petronas' Stake Sale of Offshore Gas Asset Advances to Second Round: Sources,” Reuters, June 5, 2017, http://www.reuters.com/article/us-malaysia-petronas-sale-idUSKBN18W0WN)

International Trade and Industry Minister Datuk Seri Mustapa Mohamed urged Malaysians to adopt a “rational attitude” towards its local equity ownership policy since it would be “a grave disservice” to force a firm to continue making losses “just to maintain the 100 percent local ownership.” Mustapa said government subsidies to local companies will not improve their competitiveness and would eventually “destroy” his country’s economy. He added “foreign participation” should be allowed, “as we want our country to progress” (“Adopt Pragmatic Attitude to Local Equity Ownership Policy, Malaysians Urged,” Malay Mail Online, June 2, 2017, http://www.themalaymailonline.com/malaysia/article/adopt-pragmatic-appro...)

Singapore

Trade agency IE Singapore recently signed a memorandum of understanding (MOU) with the Myanmar Investment Commission, making it “easier” for Singaporean companies to cooperate with partners in Myanmar “to explore business openings there.” The MOU targets various sectors including urban and housing solutions, manufacturing, oil and gas, transport and professional services. A Singaporean minister stated that: “we note the government's efforts to create a conducive business environment for foreign investors.” Singapore is Myanmar's main foreign investor, with investments having reached USD $4.3 billion by March 2017 (“MOU will help S'pore firms looking to Myanmar,” Straight Times, June 9, 2017, http://www.straitstimes.com/business/companies-markets/mou-will-help-spo...)

Vietnam

The Secretary of the Ho Chi Minh City Municipal Party Committee Nguyen Thien Nhan welcomed US investors at a “Meet the USA 2017” forum held in the city. Nah stated that investing in Vietnam is “the right decision at the right time,” highlighting that it is “easy” for US investors to find “active” Vietnamese, given the country’s stable political environment and “peace and harmony among the people.” He also stressed his country’s willingness to cooperate with the US in the 4.0 Industrial Revolution (“HCM City Authorities Call for Further Investment from US Investors,” Nhan Dan Online, June 7, 2017, http://en.nhandan.org.vn/business/item/5258202-hcm-city-authorities-call...)

During a recent investment promotion forum held in Tokyo, Vietnamese Prime Minister Nguyễn Xuân Phúc promised to improve the business environment of his country to attract more Japanese investment. His promises included the speeding up of institutional reforms and completing investment policies “to ensure consistency, openness, transparency, predictability and convenience for investors.” Japanese Prime Minister Shinzo Abe added that both parties will cooperate to support Japanese investors in Vietnam. At the event companies from both countries signed investment agreements with a value of USD $22 billion (“PM Phúc calls for more Japanese investment,” Việt Nam News, June 6, 2017, http://vietnamnews.vn/economy/377790/pm-phuc-calls-for-more-japanese-inv...)

*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.