One Road

Dr. Amitendu Palit's picture

EODB Rankings Augur Well for BRI Investments

The recently released World Bank Ease of Doing Business (EODB) rankings have interesting findings relating to some of the countries involved in China’s Belt-and-Road (BRI) infrastructure project. One of the major groups of countries to have improved EODB rankings since last year is Central Asia. Kazakhstan (+1.06), Azerbaijan (+3.12), Uzbekistan (+4.46), Ukraine (+1.90), Kyrgyz Republic (+0.54) and Tajikistan (0.93) have all moved up the EODB ladder.

MNCs in the News-2017-08-18

China takes steps/promises measures to draw in more foreign direct investment (FDI). China’s State Council details a slew of initiatives to increase greater inward FDI (IFDI) as well as to foster specific types of IFDI. Donald Trump signs executive order authorizing US Trade Representative to decide whether or not to investigate China’s theft of American intellectual property. China’s Ministry of Commerce reports small drop in IFDI over the first seven months of 2017 year over year (YOY) while outward FDI drops dramatically over the first seven months of 2017 YOY. The Philippines is looking to Japan and China to finance investments in energy and power generation projects worth over USD $135 billion. Mitsubishi UFJ Financial Group Inc. to expand operations in Saudi Arabia to support Saudi initiatives to reduce reliance on oil. Kumho Tire Co. to be bought out by its Chinese competitor Qingdao Doublestar Co. for USD $857 million after South Korean state-owned development bank sells its stake to Doublestar. Hyundai to promote Indonesia as Southeast Asian production base because of, among other things, the ASEAN Trade in Goods Agreement will remove car import duties in 2018. Indonesia and Vietnam to boost investment activity following 7th Indonesia-Vietnam Joint Commission on Economic, Science, and Technical Cooperation. Facebook opens full office in Indonesia due to tightening regulations on foreign Internet firms. Recent report touts that Malaysia’s strategic location and competitive position make it attractive for foreign investment. US deepening investigation into money stolen from Malaysian state investment fund allegedly used to obtain around USD $1.7 billion in real estate, jewelry and art.

MNCs in the News-2017-07-14

Chinese inward foreign direct investment (FDI) in June shows slow growth year-over-year (YOY) while the first half of 2017 showed a very slight decline in inward FDI (IFDI) YOY. Twenty percent of American firms in Shanghai plan to redirect their investment elsewhere. China’s non-financial outward FDI (OFDI) over the first six months of 2017 YOY plummets due to capital controls, tight loan supervision, and overseas factors. Almost a dozen members of American Congress ask US Securities and Exchange Commission to block Chinese-led consortium from buying Chicago Stock Exchange. At a recent conference, Chinese officials tout dramatic future growth in Chinese OFDI and moneys supplied for One Belt, One Road projects. Japan External Trade Organization and India’s provincial governments increase investment cooperation for special industrial zones to meet expansion needs of Japanese firms. Toshiba still negotiating with bidders, as company strives to fulfill government demand to keep chip technology under domestic ownership. SK Group moving to aggressively increase relations with Chinese officials. China considers investment to connect Thailand's Eastern Economic Corridor with Kunming's special economic zone. Malaysian financier central figure in probes related to plundered Malaysian state development fund 1Malaysian Development Bhd. Vietnamese government gradually opens its transportation and logistics sector, providing investment opportunities for foreign firms.

MNCs in the News-2017-06-23

China’s State Council announces that 27 restrictions relating to foreign direct investment (FDI) in its free-trade zones have been eliminated. China’s non-financial outward FDI (OFDI) plunges by almost 53 percent for the first five months of the year year-over-year (YOY). Chinese legal experts suggest new international legal mechanisms may be needed to deal with disputes involving Chinese OFDI. China’s Huadian, a state-owned enterprises (SOE), and Russia’s TGC-2 announce nearly $600 million joint venture power project has come online. After years of decline because of political tensions Japanese companies now more willing to invest in China. Survey shows Japanese firms willing to increase investment in Thailand especially in Eastern Economic Corridor. Samsung Electronics Co. about to finalize talks on expanding its US production facilities, a move motivated by Donald Trump’s election. Jakarta promises more easing of rules to increase foreign investment. PGN, Indonesia’s National Gas company, plans to make Batam Indonesia a center of natural gas supplies and a “paradise” for energy investors. Malaysia Digital Economy Corp welcomes Japanese ICT firms to use Malaysia as a stepping-stone for entering the Southeast Asian market. Malaysia’s Construction Industry Development Board to participate in bidding process for Indian railway stations’ makeover.

MNCs in the News-2017-05-26

China’s Ministry of Commerce (MOFCOM) reports the country will significantly reduce its negative list for inward foreign direct investment (FDI). China counters German criticisms of its market access by saying it will open its auto sector and that Germany had profited substantially from China’s past opening. China’s new cybersecurity law is sparking foreign companies to move to comply and deterring foreign company hardware/software sales. From January through April, China’s non-financial outward FDI drops significantly versus the same period last year. Japanese firms cooperate with US counterparts to develop missile defense radar. Japanese firms not enthused about China’s OBOR and see better business opportunities flowing from other initiatives. Japanese multinational firms that have invested heavily in Africa are worried about the continent’s prolonged economic slump. The leader of Korean SK Group leave for Beijing to meet with Chinese officials to normalize relations after his country’s installation of THAAD. K-Sure signs USD $3 billion deal to finance clean fuels project in Kuwait. Geely buys 49.9 percent of troubled Malaysian carmaker Proton. Malaysian Prime Minister says government programs make Malaysia’s FDI inflows for this year surpass last year’s. Vietnam plans to set up three special economic zones to boost foreign investment. Vietnam’s Deputy Prime Minister reiterates country’s dedication to welcoming foreign investors.

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.

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