Hot Topics for MNCs, Cool Analysis*
June 14th, 2023
The United States (US) has been striving for some time to hinder China’s acquisition of technology-related hardware, software, and intellectual property (IP) through export controls, limits on Chinese investment in American high-tech firms, and even investigations of researchers tied to Chinese universities and think tanks. The goal ostensibly is to prevent Beijing from acquiring technology that would bolster China’s military capabilities.
March 26th, 2023
China’s 20th Party Congress in October 2022 and its March 2023 “Two Sessions” revealed the new top leadership of the Chinese Communist Party (CCP), confirmed China’s top government officials, shed light on the CCP’s current agenda, concerns, and dogmas, promulgated new policies, and presented the government’s work program.
December 29th, 2022
The United States (US) Public Companies Accounting Oversight Board (PCAOB), part of the Securities and Exchange Commission, has a variety of duties, one of which is to “inspect registered public accounting firms’ audits and quality control systems.” It had been unable to do this, however, in the case of many US-listed Chinese companies because Beijing would not permit any accounting firms to share Chinese audits.
October 11th, 2022
The sky for foreign direct investment (FDI) in the People’s Republic of China (PRC/China) is falling per a slew of recent news articles. The evidence? A large percentage of China inward FDI (IFDI) is from Hong Kong and a notable percentage of this money is “round tripping” (i.e., money flowing from the PRC through Hong Kong and then back to the PRC).
July 6th, 2022
At the recent Group of Seven (G-7) meeting in Germany, the attending countries put forth the “Partnership for Global Infrastructure and Investment” (PGII), which is a revised version of the Build Better Back World (B3W) scheme that was launched at last year’s G-7 meeting. While there was never any concrete figure attributed to B3W, the United States (US) touted B3W would catalyze “hundreds of billions of dollars of infrastructure investment” for developing countries.
March 7th, 2022
Didi Global retreats from its announced decision to cease operations in Russia. Chinese businesses in Ukraine have taken various steps to protect their workers and projects following Russia’s invasion of Ukraine. Indian tax officials launch tax probe of Huawei’s offices in India, raising further concerns about India’s stance towards Chinese tech companies. China Unicom Global criticizes the United States (US) Federal Communication Commission’s decision to terminate the operating license of its US subsidiary. As part of its contribution to Western sanctions against Russia, Japan institutes various economic sanctions against Russian businesses in Japan and implements a number of export restrictions, too. Extant Japanese economic sanctions against Russia and the possibility of more increase Japanese corporate concerns about the adverse ramifications for payments, operations in Russia, and lost export sales. The Korea Communications Commission tells both Apple and Google that they need to redo their plans for complying with Korea’s Telecommunication Business Act which has ramifications for in-app payment systems. Korean construction firms encounter multiple challenges as a result of Russia’s invasion of Ukraine and the subsequent imposition of economic sanctions on Russia.
January 31st, 2022
China’s Ministry of Commerce (MOFCOM) touts that China will act to attract foreign direct investment (FDI) despite a challenging environment. In the wake of a backlash following its removal of Xinjiang products from its shelves, Guangdong Administration for Market Regulation fines Sam’s Club for deceptive consumer practices on its app. Beijing municipal government fines 7-Eleven China for the latter’s website maps that have problematic presentations of Taiwan and other territory. China’s work and the presence of dredgers at Cambodia’s Ream naval base concern the United States and others that China’s seeks to station military assets there. Indian tax authority probe causes it to demand Xiaomi India pay unpaid customs duties. Sri Lanka asks China for debt relief on loans used to pay for Belt and Road Initiative projects. Ruling parties from Japan and Taiwan agree to pursue cooperation on semiconductors to alleviate semiconductor shortages and address the China high-tech challenge. Japanese companies remain committed to Myanmar despite the latter’s serious political, economic, and other problems. The chair of Korea’s Fair Trade Commission (KFTC) promises to continue to improve the KFTC’s regulation while supporting innovation. Apple submits plan to Korea Communications Commission that allows alternative in-app payment systems and reduces payment fees.
December 7th, 2021
China’s Ministry of Commerce (MOFCOM) reports China’s utilized inward foreign direct investment (FDI) for the first 10 months of 2021 increased 17.8 percent over the prior year period. China imposes various fines on Taiwan’s Far Eastern Group, pointing out that independence supporters and “‘their connected companies and financiers must be punished.” JPMorgan Chase CEO Jamie Dimon quip about the longevity of his firm versus the Chinese Communist Party leads to multiple apologies. China’s State Administration of Market Regulation (SAMR) issues a guidance document about anti-monopoly compliance that includes provisions relating to anti-trust practices and risks overseas. China’s Belt and Road Initiative (BRI) in Pakistan encounters various serious challenges and disappointments. China’s high-speed BRI railway in Laos officially opens with questions about its ability to deliver the economic goods and economic viability. Japanese government taking steps to institute a system for intensified security screening of foreign goods, parts, and service providers. Japan will enhance cooperation with International Labor Organization (ILO) to ensure Japanese companies have better human rights due diligence systems. Korean legislator charges that Apple and Google are not sufficiently complying with law barring dominant app store operators from forcing app developers to use their payment systems. Korea’s SK Hynix may not be able to upgrade memory chip factory in China due to United States opposition to its planned use of ASML chip making equipment.
November 2nd, 2021
China Ministry of Commerce (MOFCOM) releases 5-Year Plan and notes China will keep opening up select sectors and make it easier for high-quality investors to enter them. MOFCOM expects China will remain a top global recipient of inward foreign direct investment (FDI) even as the country works to improve the quality of inward FDI (IFDI). China’s Ministry of Finance promises that China will provide a level playing field in government procurement to foreign goods and services providers are concerned. Indonesia now has to allocate government moneys to accelerate its Belt and Road Initiative high-speed railway project which is overbudget and behind schedule. China’s Cosco stake in the Piraeus Port Authority (Greece) surges to 67 percent with some questioning the merits of Cosco getting a higher stake. FDI from mainland China and Hong Kong in Japanese real estate, some with forests and access to water resources, raises concerns due to a lack of good data and legal structures to regulate what is done with natural assets. TSMC will build a semiconductor plant in Japan that Tokyo will support with financial assistance in an effort to boost its economic security. Korea Fair Trade Commission will not yet tough regulation of big tech companies, but it watching careful to limit unfair business practices. Korea companies are becoming increasing players in overseas mergers and acquisitions with their attention shifting to the United States and Europe as well as high-tech sectors.
October 2nd, 2021
China Ministry of Commerce (MOFCOM) looking at negative list for cross-border services trade in the country’s free trade zones (FTZs). China’s Ministry of Industry and Information Technology publishes draft regulations relating to the classification of data and data export restrictions. American Chamber of Commerce in Shanghai indicates members doing well in China, optimistic about their revenue prospects, and have little intention to move outside of China. High-level Chinese official says Pakistan needs to provide high-level security assurances for China-Pakistan Economic Corridor (CPEC). Chinese outward foreign direct investment (FDI) flows into India severely constrained by bilateral tensions, though some Chinese mobile apps have found new ways to resume operations. COSCO Shipping Ports, to acquire a 35 percent stake in container terminal at the Port of Hamburg. To settle a Japan Fair Trade Commission investigation, Apple modifies the payment policies for some App Store apps. Japan protests South Korean court order forcing Mitsubishi Heavy Industries Ltd. (MHI) to sell assets to provide compensation for wartime forced labor. Samsung calls upon United States (US) to increase tax incentives for its semiconductor FDI in the US. European Commission representative travels to Korea to encourage Korean semiconductor markets to establish operations in the European Union. US Department of Commerce demands confidential business information from Korean chipmakers because of concerns about automobile sector chip shortages. China’s measures to limit online gaming time for young gamers have potentially big longer-term implications for Korean gaming companies.