FDI

MNCs in the News-2020 October

China’s Ministry of Commerce (MOFCOM) says that inward foreign direct investment (FDI) increased 5.2 percent for the first nine months of 2020 when compared to the same period the prior year. China’s National People’s Congress Standing Committee approves revised export control law. Germany says reciprocity needed if there is to be a European Union-China investment agreement and notes barriers facing European companies in China remain too high. State-owned Assets Supervision and Administration Commission (SASAC) of the State Council points out Central State-owned Enterprises (SOEs) contribution to China and the realization of is 13rd Five-Year Plan. Sweden bans Huawei and ZTE from its core 5G mobile networks. Italy prevents Fastweb, the Italian unit of Swisscom, from using Huawei equipment in its core network. Japan will not participate in US initiative to block Chinese companies from participating in its telecommunications systems. Japan’s NEC Corp. will support United Kingdom government in its effort to develop a next generation 5G wireless network. Consortium led by Japan’s Sumitomo Corp. will develop massive $4.29 billion smart-city project in Hanoi. Mitsubishi Motors will work with Thailand agency to develop system that would allow electric vehicle batteries to power homes. Korean Fair Trade Commission to set up plan to investigate Google for potential abuses of its mobile operating system. Seoul to require Korea Resources Corp. to sell off certain assets to improve its financial condition. Samsung Fire & Marine and Samsung Life face criticisms for support of coal projects and investments through project financing, bonds, and insurance underwriting. Korea’s Doosan Heavy Industries & Construction signs $2.2 billion contract with Vietnam’s VAPCO for massive coal power plant.

Wong MNC Center orchestrated volume entitled China’s Maritime Silk Road, Africa, and the Middle East: Feats, Freezes, and Failures publicized on Palgrave MacMillan

China’s Maritime Silk Road, Africa, and the Middle East: Feats, Freezes, and Failures is now publicized on the Palgrave MacMillan website. This edited volume, initiated and brought to fruition by the Mr. & Mrs. S.H.

Founding Executive Director Jean-Marc F. Blanchard interviewed for Financial Times story about plummeting China-US bilateral investment

Dr. Jean-Marc F. Blanchard, Founding Executive Director of the Mr. & Mrs. S.H. Wong Center for the Study of Multinational Corporations, was interviewed for a Financial Times story covering plummeting foreign direct investment (FDI) flows between China and the United States (US). The story described trends in bilateral FDI statistics, identified some of the reasons such as Covid-19 and tensions between Beijing and Washington for the depressed numbers, and noted some future risks. Asked to comment on the reasons for the dismal bilateral FDI flows situation, Dr.

MNCs in the News-2020-September

China’s Ministry of Commerce (MOFCOM) issues rules relating to China’s long-discussed “unreliable entities” list. MOFCOM tells foreign companies not to worry about unreliable entities list as it is not targeted at any specific country or company. China’s State Administration for Market Regulation is preparing to launch an antitrust investigation into Google relating to Google’s alleged abuse of the Android mobile operating system’s dominant position. MOFCOM, China’s National Bureau of Statistics, and the State Administration of Foreign Exchange issue report showing Chinese outward foreign direct investment (FDI) fell 4.3 percent year-over-year in 2019. Chinese outward FDI (OFDI) in the United States (US) plummets to record lows because of Covid-19 and US-China political frictions. Indian Minister says there will be no blanket ban on all Chinese mobile apps, nor will Chinese companies be excluded from 5G contracts for wireless equipment. The tightening of US restrictions on the export of semiconductors will have potent adverse effects on Japanese companies. Frictions relating to the fees Apple takes in conjunction with its App stores have sparked regulatory attention in Japan. Covid-19 and the resignation of former Prime Minister Abe Shinzo are hindering the expansion of Japanese OFDI in Africa. Hitachi may terminate its multi-billion-dollar project in the United Kingdom (UK) to build two nuclear reactors because of a failure to obtain UK government support to cover rising project costs. Korean semiconductor firms will suffer big loss of business due to new US restrictions on the export of semiconductors to Huawei. Korea Fair Trade Commission apparently sends signal to Google that it is being watched for its app store fee collection practices. Korea’s Hyundai Engineering & Construction led consortium wins $573 million railway project in the Philippines.

MNCs in the News-2020 August

On October 1, China will establish a new compliant mechanism that, among other things, will allow foreign business associations to raise concerns about the investment environment. China’s Banking and Insurance Regulatory Commission has given permission for a second foreign asset management joint venture (JV), involving BlackRock and Temasek. Looking to exploit China’s financial sector opening, JPMorgan will spend a huge amount of money to take full control of its China mutual fund JV. Foreign pharmaceutical companies fail to win public hospital bulk medicine purchase contracts in China due to an apparent unwillingness to cut prices to near zero. China based firms such as Foxconn reportedly looking at expanding their presence outside China in countries such as Mexico due to troubled political economic environment. Sino-Indian tensions drive Alibaba to suspend plans for new investments in India. US backlists 24 Chinese firms because of their role in the building of South China Sea artificial islands. Chinese outward foreign direct investment (FDI) in Belt and Road countries jumps nearly 29 percent for the first seven months of 2020 year-over-year. Japan will move to improve administrative procedures, such as allowing English paperwork, to draw in more FDI and improve Japan’s prominence as a financial center. Japan is considering tax and other measures to enhance Japan’s role as an international financial center. A Japanese ruling party official raises concerns about TikTok with respect to data privacy and national security. Japan, Australia, and India are discussing a supply chain resilience initiative. South Korean regulators are watching what the US, Japan, and India do vis-à-vis TikTok before they decide how to address relevant data privacy and national security concerns. India’s exclusion of Chinese telecommunications players like Huawei and ZTE from its 5G network may create openings for Korean players.

Dr. Jean-Marc F. Blanchard's picture

Small Waves Precede Tidal Waves: American Sanctions on Chinese Companies involved in South China Sea Island Building and their Larger Ramifications

The United States (US) Department of Commerce recently blacklisted two dozen Chinese firms which it said, “played a ‘role in helping the Chinese military construct and militarize the internationally condemned artificial islands in the South China Sea.’” Companies listed included Guangzhou Haige Communications Group, China Shipbuilding Group, and China Communications Construction Co. (CCCC). The US State Department later accused CCCC and its subsidiaries of “‘corruption, predatory financing, environmental destruction and other abuses.’”

Dr. Hwy-Chang Moon's picture

More or Less Globalization? Thinking about the Real Lessons of Covid-19

Many contend the lesson of Covid-19 is the need to reduce global business activities, particularly the United States (US)’s dependence on China for imports of manufactured goods. They further assert American multinational corporations (MNCs) operating overseas, particularly in China, should return to the US, undertaking a so-called a “reshoring strategy.” The wisdom of such propositions, however, is open to debate.

Mr. Naoyuki Haraoka's picture

The Coronavirus Reveals Inconvenient Truths

The spread of international supply chains has played a key role in advancing globalization as well as enabling greater production efficiencies at multinational corporations (MNCs) because it has facilitated the division of labor. This has especially been the case where manufacturing industries, an engine of the global economic growth, such as automobiles, are concerned.

MNCs in the News-2020 July

Chinese President Xi Jining courts foreign direct investment (FDI) in encouraging letter to the Global CEO Council. China plans to impose sanctions on United States (US) company Lockheed Martin because of the latter’s weapons sales to Taiwan. China’s new, strict cybersecurity laws and regulations have driven Morgan Stanley, a US investment banking firm, to block its interns in China from remotely accessing its virtual network. The recent border clash with China has increased the pressure on New Delhi to reduce the country’s dependence on Chinese solar goods. Various special interest groups have called for the US to sanction China’s CRRC after the US Pentagon labeled it as backed by the Chinese military, saying it represents a security threat. Despite calls for a boycott in the wake of India’s border clash with China, many are skeptical Chinese smartphones can be displaced from the India market. Japanese and British trade negotiators agree they will not require encryption keys or the localization of data. Japan’s Mizuho Financial Group faces growing shareholder pressure to stop financing coal projects. Japan helps Japanese companies move to Vietnam and also helps them shift production lines to Japan as well as various Southeast Asian countries. Myanmar gives three Japanese firms permission to build a mega-liquified natural gas power plant. Korea to spend billions to promote an innovation-based economy. European Union to restart review of the merger of Daewoo Shipbuilding & Marine Engineering and Hyundai Heavy Industries Holdings. Incheon Port Authority joins the United Nations Global Compact. The backlash against Huawei creates some openings for Samsung, though it is unclear if the Korean firm can exploit them.

Dr. Jean-Marc F. Blanchard's picture

Dashing for the Door Due to Dealing in Data or Singapore Sling

The recent passage of the National Security Law for Hong Kong has raised all kinds of quandaries for high-technology and other companies, especially those that deal in data. This is so because the new law makes it easier for government authorities to access data, restrict the kinds of content that are published, and control the transmission of data. In the event of noncompliance with (vague and likely fluid) regulations, firms risk significant fines, imprisonment, or other sanctions. There has been a mild reaction by big firms such as Apple, Facebook, and Google, but they are not located in Hong Kong per se and their longer-term plans are unclear. Businesses actually located in Hong Kong face a serious quandary.

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