foreign direct investment

Dr. Jean-Marc F. Blanchard's picture

Banking Blowups, the US-China Trade War, and Implications for China’s Financial Sector Reform

Dr. Jean-Marc F. Blanchard
Posted: Aug 02, 2019

In my March blog, I expressed skepticism about China’s financial sector reform due to Beijing’s myriad political and economic reasons for maintaining control of the banking, insurance, and securities sectors.

MNCs in the News-2019-07-26

China’s Vice Minister of Industry and Information Technology said the relocation of foreign companies due to the United States (US)-China trade war is “limited and under control.” China opens financial sector to overseas firms while moving to minimize risks confronting the sector. US Senator Joe Manchin raises alarm about 2017 USD $83.7 billion-dollar investment deal in West Virginia. Malaysia and China agree to resume Belt and Road Initiative (BRI) project East Coast Rail Link (ECRL) following an agreement to cut the project’s cost by about one-third. Major Japanese firms sign on to 30% Club, a global initiative aiming to put more women in top leadership positions globally. US National Security Advisor John Bolton says US does not intend to mediate Japan-South Korea forced labor and trade conflict. South Korean distributors of Japanese goods in South Korea suffering from boycott. Trade conflicts around the global are driving South Korean chaebol to invest in the US to escape the problems associated with these disputes.

Dr. Hwy-Chang Moon's picture

Korea’s Growing FDI in the ASEAN Healthcare Sector

Dr. Hwy-Chang Moon
Posted: Jul 24, 2019

The demand for healthcare is growing rapidly in the Association of Southeast Asian Nations (ASEAN), driven by ageing populations and rising incomes.

Mr. Naoyuki Haraoka's picture

ASEAN is No “Plan B” for US-China Trade War Disruption of Japanese MNC GVCs

Mr. Naoyuki Haraoka
Posted: Jul 22, 2019

A quarter of Japanese manufacturing is done overseas with the subsidiaries of Japanese multinational corporations (MNCs) venturing overseas to extend global value chains (GVCs) that begin in Japan. Under the resulting structure, the majority of Japanese manufacturing exports head towards overseas subsidiaries with capital ties to headquarters in Japan.

MNCs in the News-2019-07-19

Reports suggest that following intensifying China-United States (US) trade frictions, a growing number of foreign multinational corporations (MNCs) are considering moving their manufacturing out of China. At a recent China State Council meeting, officials state China aims to provide better intellectual property rights (IPR) protections and that it will treat domestic and foreign firms equally. China courts Japan’s involvement in the Belt and Road Initiative (BRI) purportedly to improve the BRI’s image. Bangladesh works to calm foreign investors in the wake of a violent clash between local and Chinese workers at the Chinese-invested Payra thermal power plant. Japan’s Fair Trade Commission (FTC) moves forward on guidelines to regular IT giants’ use of personal data without consent. Korea preparing plan to “‘to reduce the country’s dependence on Japan’s materials, components and equipment industries.’” Korean firms threatened by possibility that Japan will “remove Korea from its export white list.” Hyundai Motor Co. and Hyundai Motor America have requested the US International Trade Commission to start an investigation against four auto part importers.

MNCs in the News-2019-07-12

Inward foreign direct investment (FDI) flows into China continue to grow, especially in the high-tech sector. Chinese Ministry of Commerce (MOFCOM) official states that Inward FDI (IFDI) is not leaving China en masse and that China will “protect the legitimate rights and interests of foreign investors.” Chinese outward FDI (OFDI) to Europe and North America over the first six months of 2019 shows a noticeable decrease over the same period the prior year. Despite a spying incident and Poland’s President saying he was opposed to Chinese OFDI (COFDI) in strategic infrastructure, Poland’s Foreign Minister told visiting Chinese State Councilor Wang Yi Poland is open to COFDI. Korea reacts strongly to Japanese media report in which a senior member of Japan’s Liberal Democratic party charged dual-use chemicals exported to South Korea ended up in the North. Japan is surprised at Seoul’s strong response to it instituting tighter controls on the export of certain chemicals to South Korea and Seoul making the issue a World Trade Organization (WTO) issue. Japan moving towards a formal WTO case regarding Seoul’s provision of subsidies to South Korean shipbuilders. Hyundai Engineering and Construction signs a $2.7 billion contract with Saudi Aramco for two projects relating to a massive oil and gas refining complex.

MNCs in the News-2019-07-05

Chinese Premier Li Keqiang announces China plans to create a better environment for foreign direct investment (FDI) in China. China’s financial opening leads various foreign investors to move to take control of their China joint ventures (JVs). Chinese outbound mergers and acquisitions (M&A) volume for the first six months of 2019 is the lowest since 2013. During a visit to China, Turkey’s President works to attract Chinese FDI and take advantage of the Belt and Road Initiative (BRI). With the activities of information technology giants gaining increased Japanese government scrutiny, the Japan unit of Facebook joins Keidanren. Japan’s export curbs on semiconductor materials bound for South Korea due to their dispute over forced labor compensation could pressure Samsung and the broader Korean economy. Japanese export controls on high-tech materials and chemicals used in South Korean semiconductor and smartphone manufacturing will stress Korean companies already feeling market and trade pressures. After a gathering between United States (US) President Donald Trump and the heads of major South Korean business groups, some Korean firms stated they would boost their US investments.

MNCs in the News-2019-06-28

President Donald Trump’s tough stance on intellectual property rights (IPR) violations seems to be driving China to treat foreign IPR more respectfully. At the Osaka G20 Summit, Chinese President Xi Jinping announces several measures China will undertake to open its market further to foreign direct investment (FDI) and improve IPR protection. This past week witnessed the creation of the Belt and Road Economic Information Partnership (BREIP). Two major BRI projects in Africa end. At the Osaka G20 summit, participating countries embrace Japan’s international principles for quality infrastructure. Japan tells two leading candidates for the British Prime Ministership it does not want a “no deal Brexit.” As part of its downstream growth and diversification strategy, Saudi Aramco and its affiliates have signed a dozen accords with South Korean companies covering sectors areas like shipbuilding, engine manufacturing, and petrochemicals. A consortium involving Korea Hydro & Nuclear Power (KNHP) and KEPCO Plant Service & Engineering (KPS) signs a five-year maintenance service deal for the Barakah nuclear power plant, but fails to garner responsibilities for maintenance services, nuclear scientists, and engineers.

MNCs in the News-2019-06-21

China Premier Li Keqiang works to lure foreign direct investment (FDI) during the Global CEO Council in Beijing. In 2018, the deal value of European mergers and acquisitions (M&A) activity in China soared by 856 percent to USD $9.94 billion. European Union (EU)-China talks on a Comprehensive Agreement on Investment and China’s negative list show better progress than expected. Brazilian Vice President welcomes Chinese FDI in infrastructure as long as it creates jobs and respects Brazilian rules. Around the time of the G-20, French President Emmanuel Macron will discuss issues about the Renault-Nissan alliance with Japanese Prime Minister Abe Shinzo. Numerous Japanese corporate subsidiaries in the United States have voiced opposition to Donald Trump’s proposal to slap tariffs of 25 percent on another $300 billion of Chinese products. Tokyo has requested Seoul to establish an arbitration panel consisting of representatives selected by other countries to help deal with their wartime forced labor compensation dispute. Seoul prepared to block a deal that would sell Taihan Electric Wire to a Chinese company because it deems Taihan’s high-voltage cable technologies a “‘national core technology.’”

MNCs in the News-2019-06-14

People’s Bank of China willing to back “pilot program based in Shanghai to remove the foreign ownership limit in firms providing securities and fund management services.” According to China Ministry of Commerce report, the growth rate of United States (US) foreign direct investment in China seems to be slowing. Chinese firms have been become increasingly active in hydropower sector overseas. Shanghai’s new technology board seen offering opportunities for Chinese firms encountering limits in dealing with the US or US companies. Tokyo Electron not to supply “Chinese clients blacklisted by Washington.” Japan’s Inpex ready to agree in principle with Indonesia to build a USD $18.4 billion liquefied natural gas plant. Renault Samsung Motors union cancels plans for an all-out strike due to workers going on strike against union management. LG Chem forms 50-50 joint venture with China’s Geely to position itself for new market opportunities after Chinese government electric vehicle battery subsidies cease.

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