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Dr. Jean-Marc F. Blanchard's picture

Bad THAAD, THAAD’S Bad: Reflections about China’s Economic Sanctions and their Implications for Multinational Corporations

For about the past three months, Beijing has been escalating economic pressure on South Korea because of the latter’s decision to deploy the Terminal High Altitude Area Defense (THAAD) anti-missile system to counter North Korea’s missile threat. Chinese economic coercion has encompassed barriers to Korean cultural products like K-Pop bands, television shows, and online games entering China, bans against Chinese tourists going to Korea, the shutdown of Korean stores in China, the cessation of investment deals, and reduced buying of Korean products.

MNCs in the News-2016-03-11

China’s Ministry of Commerce (MOFCOM) reports that foreign direct investment flows into China topped USD $22.5 billion in the first two months of 2016. Bristol-Myers Squibb moves to deal with fallout of US Securities and Exchange Commission (SEC) Foreign Corrupt Practices Act settlement relating to its China joint venture. Chrysler to recall nearly 21,000 vehicles in China that have an oil pipe defect. Chinese outward foreign direct investment (COFDI) soars YOY with smaller and private enterprises becoming more important proportionally. Statistics for 2015 show strength of COFDI in Europe. China sees room for more COFDI in Russian agriculture as well as agricultural cooperation. Some believe COFDI in the US has the potential to influence voting patterns in some localities. Chicago Transit Authority awards CSR Sifang America a USD $1.3 billion railcar supply order. Mitsubishi partners with Korean firm on government awarded coal-fired power plant project in Vietnam. Foreign businesses in Korea voice concern about the discretionary legal and regulatory environment and call for greater stability. Korea Trade-Investment Promotion Agency has concluded a Memorandum of Understanding with Italy’s SIMEST that will facilitate more Italian investment in Korea. Korea and Egypt expand their bilateral cooperation increase infrastructure and cooperation opportunities for Korean firms in Egypt. The liberalization of Indonesia’s cinema sector draws increases foreign investor interest in cinema screen construction in the country. The Thai Business Development Department (TBDD) and Franchise License Association (FLA) will cooperate to assist franchise business operators conduct business in ASEAN countries, China, and Japan. State Railway of Thailand (SRT) governor welcomes foreign construction companies to participate in government investment projects provided they find a Thai partner and obey Thai rules and regulations.