One Belt

MNCs in the News-2017-04-21

Big foreign companies increasingly willing to voice complaints about the situation in China. China’s limits on capital outflows affect the willingness of some to invest in China. Beijing is considering “braking” the requirement capping foreign companies ownership in the auto sector to no more than 50 percent with some predicting a crash of domestic firms if this happens. China’s nonfinancial outward foreign direct investment (OFDI) experienced major drops in March over the prior year and over the first quarter of 2017 year-over-year (YOY). China’s One Belt, one Road (OBOR) initiative leads to the signing of a major number of transportation related accords. Sharp considers joint bid with Hon Hai on Toshiba’s memory chip unit as it seeks to mitigate national security concerns. Kia plans USD $900 billion car manufacturing plant in India to surmount India’s steep import duties and China’s anti-Korean economic sanctions. Malaysian trade mission to South Korea brings home Korean investment worth around USD $550 million. Malaysia seeks to increase its cooperation with New Zealand in IT and tourism sectors. Vietnam develops public-private partnership framework allowing more foreign investment particularly from Japan in its infrastructure sector. Hoang Son Trading Investment JSC partners with Spanish-Japanese joint venture to build new solar plant in Vietnam.

MNCs in the News-2017-03-24

The Information Technology & Innovation Foundation (United States) has called for global action in the face of China’s Made in China 2025 plan. Chinese Ministry of Industry and Information Technology (MIIT) official defends his country’s “Made in China 2025” plan. China’s Food and Drug Administration issues draft policy that would allow foreign drugs to be tested and approved much more quickly in China. During a visit to China, Apple CEO Tim Cook announces Apple will open new R&D centers in Shanghai and Suzhou. Microsoft touts the development of a China-specific Windows 10 operating system that is “secure and controllable.” Chinese government agencies are working on a policy that would specify those sectors where outward foreign direct investment (FDI) was encouraged and those where it was restricted. Tokyo says it does not plan to support troubled Toshiba and that it will share information with Washington about Toshiba and its bankrupt US nuclear division. Japanese and Russian officials meet to discuss ways to jointly develop the islands off Hokkaido they both claim. South Korea asks the World Trade Organization to review Chinese sanctions against Korean companies relating to its deployment of THAAD. South Korea’s SK Engineering & Constructions partners with Turkey’s UNIT International to win multi-billion dollar power plant construction project in Iran. Energy firms urge Indonesian government to enhance its policies in the upstream and downstream oil and gas sectors.

MNCs in the News-2017-03-10

European Chamber of Commerce in Beijing highlights China’s 2025 Plan as possibly violating China’s World Trade Organization (WTO) commitments. China’s re-imposition of capital controls becomes a hot issue at China’s 2017 National People Congress meeting. Facing seemingly severe constraints on their ability to access/use yuan, Chinese corporate executives are complaining about the impact of such limits on their ability to do deals. In the face of possible increased American trade barriers, Great Wall Motor Co. ponders building its first factory in the United States (U.S.). Wanfeng Auto Holding Group looks to the U.S. for deals to jump potential tariff and other barriers in the U.S. Toyota Motor Corp. may wait until economic fallout of Brexit becomes clearer until it decides whether or not to produce the next generation Auris in the United Kingdom (U.K.). Honda announces plans to invest $150 million in transmission facilities in Georgia and Ohio in the US. Chinese sanctions against South Korea because of the latter’s deployment of the Terminal High Altitude Area Defense system hit Korean companies inside and outside China. Korea’s Trade Minister meets with US Commerce Secretary Wilbur Ross to seek ways to boost investment and other forms of cooperation. Indonesia explores new levels of investment cooperation with Japan. Indonesia welcomes small amount of investment from Saudi Arabia flowing from visit of Saudi king, but does not receive large amounts expected.

MNCs in the News-2017-02-24

Capital outflow limits and consumer sector investment liberalization measures affect both the volume and sectoral distribution of foreign direct investment (FDI) flows into China. Chinese restrictions on capital outflows are affecting how sellers perceive Chinese investors. Members of the US Congress are looking to empower the Committee on Foreign Investment in the US to scrutinize Chinese investors more rigorously. The European Commission launches an investigation of planned Chinese high-speed railway project connecting Hungary and Serbia. Uncertainties surrounding Trump Administration policies are making Japanese firms, with the exception of auto firms, cautious about investing in the US. Suzuki Motor Corporation obtains incentives that will cause it to expand its investment in Pakistan. Lotte is explicitly warned by China not to meet the South Korean government’s demand for land for its THAAD system. South Korea’s SKC Ltd. and Japan’s Mitsui Chemicals- Mitsui Chemicals & SKC Polyurethanes Inc. (MCNS) will set up a facility in India to produce polyurethanes. Freeport-McMoRan threatens to sue the Indonesian government if they do not resolve their dispute over Freeport’s obligations. Indonesia solicits Saudi investment, especially in non-oil and non-gas sectors.

MNCs in the News-2017-02-10

China’s goal of shifting to a more consumption, service, and higher-valued added economy is reflected in subnational level data. China remains optimistic about Chinese outward foreign direct investment (FDI) in 2017, but plans to guide it to and sees it encountering many challenges. Syngenta believes the ChemChina-Syngenta acquisition will close in second quarter of 2017 despite remaining regulatory hurdles. China halts major Lotte construction projects in northeastern China in apparent punishment for South Korea’s embrace of THAAD. Prior to Japanese Prime Minister Abe Shinzo’s early February meeting with US President Donald Trump, Sharp Corp. announced it would build a liquid crystal display panel plant in the US. Softbank CEO Masayoshi Son touts his progress in fulfilling his job creation promise to U.S. President Donald Trump. Chinese forthcoming revised anti-monopoly guidelines worry South Korean firms which fear they might be used against it. In the face of political pressures, Samsung Electronics will build its first home appliance plant in the US despite fears about the price competitiveness of US production. Moody’s Investor Service upgrades its credit outlook for Indonesia with positive implications for Indonesia’s ability to attract FDI. Indonesian aviation regulatory burdens cause Tigerair to cease its flights to Bali island.

MNCs in the News-2016-12-23

American firms fret that Trump’s stances on China trade and Taiwan may lead China to retaliate against them. Chinese firm drops contract with Korean software and platform provider due to sensitivities about Korea’s decision to deploy the THAAD system. Foreign decision makers strongly distrust Chinese state-owned enterprises where merger and acquisition deals are concerned. China retorts those critics arguing One Belt, One Road is a massive dumping scheme do not understand the idea of a double circulation economy. Japan is moving to force foreign pharmaceutical product prices to undergo annual reviews. Softbank pledges $1 billion investment in United States (US) as a partial fulfillment of a commitment made to US president-elect Trump. Russia, Japan, and many private companies strike new deals leading to cooperation possibilities in new areas. Japanese firms still intrigued by opportunities in the United Kingdom (UK) despite Brexit. The UK and Japan glow about a major nuclear cooperation agreement. The European Commission has fined Sony Corp., Panasonic Corp., and Sanyo Electric Co. regarding rechargeable lithium-ion battery price fixing. Investment in South Korea’s free economic zones is soaring but below prior highs. Hyundai Heavy Industries Co. wins two orders including one from Iran’s state-owned Islamic Republic of Iran Shipping Lines, the latter’s first post sanction order. Indonesia and Google fail to come to a settlement about Google’s alleged tax underpayments. Thai Prime Minister Prayuth Chan-ocha orders mine operated by Australian gold miner Kingsgate subsidiary Akara Resources to shut down for health and environmental reasons. Vietnam’s inward FDI hits new low for the year.

MNCs in the News-2016-12-09

China’s Ministry of Commerce (MOFCOM) and National Development and Reform Commission (NDRC) have reduced the number of sectors on its foreign investment catalog restricted and prohibited lists by more than 30 percent. China’s State Administration of Foreign Exchange (SAFE) has denied there are restrictions on foreign firms' crossborder profit transfers. The NDRC has imposed a more than $17 million fine on Medtronic for violating China’s anti-monopoly laws. China’s national cybersecurity standards body, The Technical Committee 260, ignores foreign company pleas about its technical standards for operating systems, microprocessors, and office software. China’s concerns about capital flight and money laundering led it to strengthen its review of overseas deals exceeding USD $10 billion and in an overseas entity unrelated to the investor’s core business. China launches $22 billion fund to support overseas investments by Chinese companies. Chinese investment in Europe soars over 2015 totals. Softbank owner Masayoshi Son promises Donald Trump he will make a massive investment in the US. South Korea’s largest steel pipe producer buys two oil country tubular goods (OCTG) related facilitates in the US to escape possible US trade barriers. Indonesia’s Ambassador to Singapore encourages greater investment from Singapore, Indonesia’s largest foreign investor. Chinese investment in Indonesia soars, helping with infrastructure development, but raising some concerns. Chinese delegation from Zhejiang province to travel to Indonesia to assess the political risk environment in the country. Foreign companies in Thailand ask Prime Minister to update its laws pertaining to foreign workers. Official Thai delegation to China hopes to attract more investment, reinforce the relationship, and increase cooperation on China’s One Belt, One Road initiative. Malaysian Prime Minister Najib Razak rejected the notion he was trading the country’s sovereignty for foreign investment. Vietnam’s FDI inflows reach record highs and Vietnam promises steps to attract more investment.

Wong MNC Center Executive Director Dr. Jean-Marc F. Blanchard delivers keynote address at the “New Developments for Japanese and Chinese Firms” Conference

At opening of the “New Developments for Japanese and Chinese Firms” conference, Dr. Jean-Marc F. Blanchard, Executive Director of the Wong MNC Center, delivered a keynote address entitled “Patterns in Chinese Outward FDI and its Implications for Japanese Firms.” Dr. Blanchard started by providing background information on Chinese outward foreign direct investment (OFDI) from the 1970s through the 1990s, covering its volumes, sectoral destinations, geographic patterns, and drivers at the macro- and micro (firm) levels.

Dr. Jean-Marc F. Blanchard's picture

China’s Maritime Silk Roads Initiative and Southeast Asia: Rough Sailing through the South China Seas?

As our readership knows, one of China’s signature foreign policy initiatives is the Maritime Silk Road Initiative (MSRI), a key part of its larger One Belt, One Road (OBOR) scheme.

MNCs in the News-2016-10-14

China’s inward foreign direct investment (FDI) for the first nine months of 2016 grows a modest 4.2 percent year-over-year (YOY). China takes various steps to ease process for inward FDI, but foreign observers reserve judgement. Shanghai Municipal Food and Drug Administration imposes several million dollars in fines on Shanghai Husi and OSI Group’s China office for distributing reprocessed and expired meat. GlaxoSmithKline has been moving over the past two years to enhance its R&D capabilities in China and to take other steps to enhance its ability to serve Chinese patients. Chinese outward FDI in the US hits a record in 2015, spurring increased sensitivity. Chinese President Xi Jinping promises Portuguese Prime Minister his country will encourage more investment in Portugal. Alibaba plans to help Thailand with small business development, e-commerce, and e-payments. Chongqing actively engages with China’s One Belt, One Road scheme giving it all kinds of new export and logistics opportunities. Fujitsu plans to downside in the UK and denies the move relates to Brexit, though there are doubts. Japan’s SoftBank partners with Saudi Arabia’s sovereign wealth fund to create massive tech investment fund. Korean construction firm Doosan wins approximately billion dollar power plant project in Saudi Arabia. Korea Electric Power Corporation wins more than $35 billion coal-fired thermal plant contract in South Africa, the country’s first independent power project. Investors enthused about Indonesia infrastructure opportunities, but worry about requirement they be paid in rupiah. Malaysia welcomes investment in the biomass industry and announces major new investment by Korean petroleum refiner. Samsung’s massive global Galaxy7 smartphone recall may have an adverse impact on Vietnam’s growth rate. Ho Chi Minh City see big drop in investment in industrial parks and export processing zones as it pushes investment in tech rather than labor-intensive sectors.

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