MNCs in the News-2017-07-07


At a recent event in Beijing, Kenneth Jarrett, President of the American Chamber of Commerce in Shanghai, suggested the opening of China’s markets to American firms might lubricate the way for greater Chinese foreign direct investment (FDI) in the United States (US). Lately, Chinese outward FDI (OFDI) in the US has been soaring, but the review of some deals involving Chinese firms had made some question the US market’s openness and were a potential source of bilateral tension (Frank Tang, “Open Your Markets If You Want More Business in US, China Told,” South China Morning Post, July 4, 2017,

In November 2016, the National Iranian Oil Company signed a Memorandum of Understanding (MoU) with a consortium involving China National Petroleum Corporation (CNPC), France’s Total, and Iran’s Petropars to develop Iran’s South Pars (SP11) gas field. Recently building on this, the parties concluded a USD $4.8 billion 20-year contract for the development of the field which is intended to produce 56 million cubic meters per day of natural gas once fully operational. CNPC, a state-owned enterprise, will have a 30 percent stake in the SP11 project (“Iran, China, France Sign $4.8 Billion Gas Deal,” China Daily, July 4, 2017,

To escalate pressure on Pyongyang in the wake of North Korea’s test of an intercontinental ballistic missile, the US is considering imposing economic penalties, such as terminating access to the US financial system, on Chinese companies and individuals that do business with North Korea. What would be new is that the US is considering placing sanctions on such targets that do business with North Korea even if these dealings have not been prohibited by United Nations Security Council actions (Josh Lederman and Matthew Lee, “US Weighs Sanctions on Chinese Companies to Punish NKorea,” The Washington Post, July 6, 2017,


Japan and the European Union (EU) are finalizing details for a broad free trade agreement which could open up key sectors among participating countries. Japanese carmakers including Honda and Toyota expect the deal to boost their EU auto sales. For their part, European dairy farmers are eyeing Japan’s currently heavily protected dairy market. The new deal lays down common rules targeting the promotion of Japanese investment in Europe and was concluded against the backdrop of the United States’ protectionist turn (Peter Goodman, “As E.U. and Japan Strengthen Trade Ties, U.S. Risks Losing Its Voice,” New York Times, July 6, 2017,

China’s one child policy, interior development projects, and controls on domestic migration, among other factors, have caused labor shortages in the manufacturing sector. These growing labor shortages are providing Japanese robotic manufacturing companies such as Yaskawa Electric and Nachni-Fujikoshi with investment opportunities. The former is ramping up production of robotic manufacturing units in its Chinese factories. The latter is planning to open a new factory by next year. Kawasaki Heavy Industries is increasing output in response to China’s government sponsored subsidies for the robotics industry (“China’s robot needs boost Japan’s industrial machinery sector,” Nikkei Asian Review, July 4, 2017,

South Korea

South Korea’s Hyundai Heavy Industries signed a MoU with state owned Saudi Aramco to set up an engine manufacturing plant in Saudi Arabia’s Ras Al-Khair. The plant will produce a medium-sized engine for ship and power generation and is expected to cost USD $400 million. Separately, the Korean firm is working on a major ship repair and shipbuilding project in Saudi Arabia. If the engine project goes well, Hyundai Heavy will have a good foundation to win future shipbuilding contracts from Saudi Arabian (“Hyundai Heavy inks MOU for marine engine plant in Saudi Arabia,” Korea Herald, July 5, 2017,

A joint business summit held by the Korean and US Chambers of Commerce in Washington, D.C. resulted in South Korean multinational companies committing USD $12.8 billion to business ventures in the US. Samsung Electronics, LG Electronics, CJ Group, and the Doosan Group are just a few of the South Korean companies building or expanding American manufacturing facilities. The government sponsored summit also resulted in companies of the two countries signing numerous MOUs relating to energy cooperation, infrastructure improvement, and joint research development (Jung Suk-yee, “Korean Enterprises to Invest US$12.8 Billion in the U.S. until 2021,” BusinessKorea, July 3, 2017,


Energy and Mineral Resources Ministry official Hadi M. Djuraid recently stated that PT Freeport’s contract extension has yet to be decided. The official made this statement in response to previous media reports claiming the opposite. Jakarta and the mining firm are currently discussing the contract extension and no decision has yet been made. Following the applicable laws and regulations, the contract can be prolonged twice, for a period of ten years maximum, “with the following requirements: to build a smelter and to divest 51 percent of shares” (“Freeport Contract Extension yet to be Decided: Official,”, July 5, 2017,


A recent industry briefing attracted potential bidders including nearly “400 participants from 165 international and local organizations” for a tender for the Kuala Lumpur-Singapore High-Speed Rail. The objective of the briefing was to inform the attendees about the progress and the key features of the railway project. Participants included those from China, Japan, South Korea and Europe. Land Transport Authority (LTA) chief executive Ngien Hoon Ping stated that they are happy to see “strong interest” from these global companies (“Key Tender for KL-Singapore HSR Draws Strong Global Interest,” Malay Mail Online, July 6, 2017,

Following the Malaysian government earlier this year dismissing a consortium involving Malaysian and Chinese firms that was committed to buy a majority stake in the Bandar Malaysia project, Malaysia’s Ministry of Finance issued a Request for Proposal (RFP) for businesses interested in the project. The government stated it would instead keep full ownership of the project. The RFP showed specific requirements for companies in terms of size and “local content,” and foreign companies are welcomed to be involved (“KL Issues Request for Proposal for Development of Bandar Malaysia,” The Straits Times, July 6, 2017,


During his recent visit to Germany, Singaporean Prime Minister Lee Hsien Loong and German Chancellor Angela Merkel discussed enhancing defense, cyber security and trade ties between both countries. At the end of 2015, foreign direct investment from Germany in Singapore was approximately S$18.4 billion, and Prime Minister Lee stated he “highly appreciates” Germany's support for the EU-Singapore Free Trade Agreement (EUSFTA) which he hopes will come into force soon ("PM Lee, Merkel discuss boosting defence, cybersecurity and trade ties between S'pore and Germany," The Straight Times, July 6, 2017,


Vietnam’s FECON Corporation signed a MoU with Saudi Arabia’s ACWA Power to jointly develop renewable energy projects in Vietnam. The MoU specified that FECON and ACWA would first assess renewable energy investment opportunities in Vietnam. After that both parties would “incorporate joint ventures” for investment in specific projects. ACWA chose Vietnam as its “first Southeast Asian investment destination in renewable energy projects” because the Vietnamese government has prioritized the development of renewable energy, particularly wind and solar energy (“VN to Co-operate with Saudi Arabia in Renewable Energy Projects,” Viet Nam News, July 3, 2017,

Vietnam’s Foreign Investment Agency has revealed that so far this year foreign investors have invested in 19 of 21 business fields, with real estate ranking second with a total investment of USD $53 billion. Foreign investment has been flowing into Vietnam’s real estate sector through mergers and acquisitions. Foreign investor’s interest has been fueled by Vietnam’s economic prospect and Vietnamese government policies that have removed barriers to foreign investors buying stakes in local companies (“Real estate M&As expected to reach record high in 2017,” Vietnam Net, July 5, 2017,

*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.