MNCs in the News*
May 19th, 2019
According to China’s Ministry of Commerce (MOFCOM), the growth rate of inward foreign direct investment (FDI) from the United States (US) into China over the first four months of 2019 dropped noticeably year-over-year (YOY). Beijing moves to tighten controls over technologies such as cloud computing, big data, and industrial security systems to bolster national information security. Expansion of American tariffs on Chinese goods drives more companies out of China. US Commerce Department’s proposed ban on hardware and service exports to Huawei could severely affect the firm and its American suppliers. Japanese companies working to use more foreign directors to enhance corporate governance and benefit from new thinking. Japan’s Toyota expresses dismay at US President Trump’s statement that “the US needs to defend itself against foreign cars and components.” FDI flows into South Korea for the first quarter of 2019 plummet YOY with some attributing it to the end of tax breaks. Hoping to position itself for the time when subsides for new energy vehicles (NEV) end, South Korea’s SK Innovation plans to open a second battery factory in China.
May 10th, 2019
The ongoing China-United States (US) trade war coupled with other economic and political factors drives more firms to consider other locations besides China. China moves to take more steps to protect intellectual property (IP), partly to assuage the concerns of foreign investors. China poured record amounts of investment into US start-ups last year despite Sino-American tensions, but there are dark clouds on the horizon especially in regard to investment screening. Security and other concerns lead US Federal Communications Commission hangs up on China Mobile’s effort to operate and offer service in the US. Not a single European country has joined Washington’s call to boycott China’s Huawei. Japanese banks move to improve their anti-money laundering and terrorist financing practices so as to increase chances of good Financial Action Task Force review. Japanese foreign direct investment in the US surges for political and economic reasons, with some “red states” seemingly benefiting from the former. Seoul police investigate if BMW Korea’s Chairman covered up automobile defects. Lotte Chemical launches USD $3.1 billion ethylene cracker complex in Louisiana with strong political support from Korea and the US.
May 3rd, 2019
Inward foreign direct investment (FDI) into China shows decent growth in the first quarter of 2019 with United States (US) FDI showing particularly strong growth. China announces moves to open its banking and financial sectors further. The United Arab Emirates (UAE)’s strategic location allows it to snare USD $3.4 billion Belt and Road Initiative (BRI) deals. Cambodia throws the dice for more China FDI deals while shifting further away from the European Union (EU). Japan ponders proposing rules to increase transparency and responsible financing for infrastructure investment in developing countries during the upcoming Group of 20 (G-20) summit. Lawyers representing South Koreans forced to labor for Japanese corporations during World War II requested a court to sell assets seized from relevant Japanese firms. South Korea Prime Minister Lee Nak-yon lobbies Kuwait to allow more South Korean companies to participate in infrastructure project in the country.
April 30th, 2019
United States (US) Trade Representative (USTR) criticizes China’s intellectual property (IP) protections and calls for stronger IP safeguards. China pledges the journey along its Belt and Road (BRI) will only get better. Survey shows new European Union (EU) foreign direct investment (FDI) screening laws make Chinese companies feel the EU is discriminating against them. United Kingdom (UK) reportedly dials into China’s Huawei participating in its 5G network activities. Eager to keep Italy from moving too close to Beijing, Japan calls for deeper economic (and military) cooperation during top leader summit. Korea charged up about lack of level playing field relating to electric vehicle subsidies. Korean petrochemical firms will be hit by the upcoming end to the US policy of granting waivers to countries importing Iranian crude oil.
April 21st, 2019
Chinese firms producing and using coal not energized by institutional investor promises to divest trillions of dollars in the fossil fuels sector. China moves to bring vigor and vim to the elderly nursing home sector through measures to encourage foreign direct investment (FDI). Chinese anti-competition authorities dial in to Ericsson for potential antimonopoly practices in licensing patents. China creates international tax cooperation mechanism under the Belt and Road Initiative (BRI) called the Belt and Road Initiative Tax Administration Cooperation Mechanism (BRITACOM). Energy Foundation China President contends China’s BRI will spark “transition to a sustainable energy future”! Japan woos Eastern and Central Europe away from BRI even while expressing support for latter. Leaked emails reveal Tokyo last spring put the brakes on any potential Renault-Nissan merger. Korean President visits Hyundai Engineering Co.’s mega $30 billion Kiyanly plant in Turkmenistan and vows to support Korean companies working with the latter. South Korea’s finance minister announces Seoul will prepare for inter-Korean economic projects in case there is an easing of sanctions on Pyongyang.
April 15th, 2019
Recent report forecasts massive increase in China’s inbound mergers and acquisitions (M&As) between 2020 and 2029. Pursuant to its trade negotiations with the United States (US), China considers eliminating entrance barriers to its cloud computing market like requiring overseas companies to form joint ventures (JVs) with Chinese firms. Chinese and European Union (EU) leaders commit to conclude a bilateral investment treaty (BIT) by next year. At the summit of Central and Eastern European countries and China in Dubrovnik, Greece announces it will join China’s 16+1 Initiative. Following the EU and United Kingdom’s delay of Brexit by six months, Tokyo pledged to continue to lobby against a no-deal Brexit and to monitor developments. Regarding the Carlos Ghosn case, France stressed to Japan that it respects the sovereignty of Japan’s judicial system and also would provide consular protection to Ghosn. Korean companies lobby their government to deal with the EU’s growing pressure on South Korea to ratify key International Labor Organization (ILO) conventions
April 8th, 2019
Chinese government shines light on subnational units that are making it difficult for foreign direct investment (FDI). China lubricating way for foreign energy giants to enter its petrochemical sector. Beijing is drafting rules to identify a list of BRI projects officially acknowledged by the Chinese government. China’s expansion in Latin America via the BRI raises US anxieties. British officials and senior labor union members will travel to Japan to press Honda to review its decision to shut down its United Kingdom (UK) Swindon plant. Toshiba experiencing delays in securing approval from the Committee on Foreign Investment in the United States (CFIUS) to sell its liquefied natural gas (LNG) business to a Chinese company. Korea Hydro & Nuclear Power (KHNP) risks bid to become long-term maintenance service provider of the United Arab Emirates (UAE) Emirates Nuclear Energy Corporation’s (ENEC) Barakah Nuclear Energy Plant because of its unilateral decision to replace plant’s workforce. Responding to a Saudi Arabian Cabinet member’s interview reporting “‘advanced’” talks, Hyundai Motor denied plans to build a new manufacturing plant in Saudi Arabia.
April 1st, 2019
Senior Chinese official touts that China will take a slew of measures to welcome more inward foreign direct investment (FDI). In conjunction with its talks with Washington, Beijing will accommodate some of the United States (US)’ demands to expand its financial market opening. Due to Beijing’s new round of liberalizing reforms, the CEO of Royal Dutch Shell said his company plans to expand its presence in China in the upstream and petrochemical manufacturing sectors. Brazil backs away from its criticisms of China in order to attract much needed Chinese FDI.
March 26th, 2019
According to China’s Ministry of Commerce (MOFCOM), inward foreign direct investment (FDI) for the first two months of 2019 grew 5.5 percent year-over-year (YOY). China’s State Administration of Foreign Exchange (SAFE) makes it easier for foreign companies to manage their foreign exchange. Italy may open four ports to Chinese FDI as part of its participation in the Belt and Road Initiative (BRI). Germany to establish state-owned fund to protect key companies from takeovers by foreign companies, especially Chinese ones. Koreans forced to work for Japanese corporations without compensation during World War II are rushing to file lawsuits before the statute of limitations runs out. Toyota announces it will build a new hybrid car in Britain for its Japanese peer Suzuki despite Brexit uncertainties. South Korea’s Gyeonggi Province considers bill requiring schools to put “‘war criminal tags’” on products manufactured by Japanese firms. South Korea’s S-Oil and Hyundai Oilbank will pay USD $127 million in fines to the United States (US) Justice Department for fixing fuel prices at US military bases in Korea.
March 18th, 2019
China’s National People’s Congress approves new foreign investment law obliging officials to protect commercially confidential information obtained from foreign companies. European Union (EU) releases policy paper in which the EU threatens to tighten rules on Chinese investment in Europe, partly in response to Chinese restrictions on EU investment in China. Top United States (US) general Joseph Dunford expresses concern that Google’s work in China directly benefits Chinese military. In response to increasing global criticism of China’s Belt and Road Initiative (BRI), Beijing calls for American and European firms to join President Xi Jinping’s signature initiative. Toyota Motor now plans to invest $3 billion more than originally planned in the US to avoid increased tariffs under the North American Free Trade Agreement. Nissan Motor Co. Ltd. will cease production of two more models at its Sunderland plant due to uncertainties flowing from Brexit. Lotte Group will leave China after failing to recover from the boycotts caused by Beijing’s diplomatic bickering with Seoul over the latter’s deployment of the Terminal High Altitude Area Defense (THAAD) anti-missile system. Seoul and Tokyo fail to resolve their frictions flowing from the legal dispute over wartime labor compensation, with Tokyo warning of economic retaliation if Seoul goes ahead with the seizures of Japanese company assets.