MNCs in the News*
September 1st, 2021
China’s utilized inward foreign direct investment (FDI) showed solid growth over the first seven months of 2021 compared to the prior year period. China’s Ministry of Commerce (MOFCOM) is working to develop an improved negative list for 2021. China’s MOFCOM orchestrates site visits for foreign Chambers of Commerce, industry associations, and businesses in Xinjiang. China’s outward FDI (OFDI) to Belt and Road Initiative (BRI) countries shows solid growth for the first seven months of 2021 year-over-year (YOY), though China’s total nonfinancial OFDI growth rate was negative YOY. India’s massive infrastructure plans attract the cautious interest of Chinese companies and investors. Chinese companies hope regime change in Afghanistan will lead to improved security and stability that facilitates restarting investment and infrastructure projects and initiating new ones. The Japanese government moves to implement a law limiting FDI or activities in sensitive areas such as near military installations or critical infrastructure. Japan’s Kirin Holdings has no intention to exit Myanmar despite the political turmoil that has flowed the military coup there. South Korea moves towards the approval of a law that will limit the ability of firms like Google and Apple for force software developers to use their payment systems on in-app purchases. Korea levies fines and penalty surcharges against Facebook and Netflix for improper data collection, disclosure, and/or cross-border data transfer practices.
August 4th, 2021
China’s Ministry of Commerce (MOFCOM) reports strong inward foreign direct investment (FDI) growth over the first half of 2021 relative to 2020. China MOFCOM spokesperson assures foreign investors that China’s national security review process for FDI will be done selectively and carefully and that China is still open. Ericsson says declining results in China affected by Swedish government’s decision to ban Huawei and ZTE from its 5G network. Reduced outward FDI (OFDI) activity by Chinese firms for various reasons including Covid is dramatically reducing their foreign currency-denominated borrowings. The United Kingdom is reconsidering the involvement of Chinese state-owned enterprise (SOE) China General Nuclear in two British nuclear power plants. Chinese President Xi Jinping highlights Belt and Road Initiative in conversations with leaders from Ukraine, Turkey, and Barbados. Japanese OFDI deal counts and volumes show notable increase in the 2nd quarter of 2021. Japanese government moves as well as the risk of boycotts and investment divestitures drive Japanese textile industry to work to purge its supply chain from human rights abuses. In the face of a social media backlash and the risk of a boycott, Japan’s Toyota once again ceases PAC donations to members of the United States (US) Congress that denied the legitimacy of the 2020 US Presidential election. Korea’s Minister for Science and ICT supports tax on overseas platform companies while warning of potential overseas taxes on Korean companies. Korea paying increasing attention to country’s OFDI flows, with some worrying it might lead to deindustrialization and unemployment.
July 3rd, 2021
China adopts law for countering foreign sanctions, which some in foreign business community in China fear may be applied against it. Japanese Chamber of Commerce and Industry in China releases report highlighting anxieties about uncertainties created for Japanese firms by a slew of new, ambiguous laws and regulations such as the unreliable entities list and national security review law. Current data do not support the thesis that China’s national security law for Hong Kong has damaged Hong Kong’s status as an international financial center. Chinese firms are expanding their overseas operations to escape home country competition, gain local knowledge, and so on. Chinese outward foreign direct investment in Belt and Road Initiative countries shows respectable growth over first five months of 2021 versus prior year period. Japan continues along the path of greater regulation of internet giants and their potential abuse of market power. South Korean district court dismisses wartime labor compensation lawsuit brought by a group of Koreans against 16 Japanese companies. Korean firms substantially increase their lobbying activities in the United States for various political and economic reasons. Korean consortium’s hopes to win nuclear power plant bid rise with Czech government’s decision to rule out the involvement of Chinese and Russian companies.
June 2nd, 2021
According to China Ministry of Commerce statistics, China’s utilized foreign direct investment (FDI) over the 1st four months of 2021 showed impressive growth. In a recent report, the British Chamber of Commerce in China highlighted China’s data rules and data flow restrictions as new areas of concern on top of continuing issues like market access and the lack of a level playing field. The China Banking and Insurance Regulatory Commission has given the United States (US)’s Goldman Sachs approval to enter into a wealth management joint venture (JV). In the wake of new data rules and various image problems, Tesla announced the construction of a new data center in Shanghai to store information on gathered on local users and their vehicles. China’s initiation of economic sanctions against various European Union (EU) officials in response to EU sanctions against China has raised questions about whether or not the ratification process for the EU-China Comprehensive Agreement on Investment will move forward. China’s Landbridge rejected concerns that its 99-year lease of Australia’s Darwin port presents any kind of a national security threat. A Japanese Liberal Democratic Party group investigating methods to enhance Japan’s economic security has proposed the creation of a public-private body to develop solutions for public policy issues like supply chain resiliency. An official Chinese media piece warned various prominent Japanese apparel companies’ decisions to stop using Xinjiang cotton might cause them to lose business in China. Japanese export restrictions against South Korea are driving Japanese semiconductor material companies to increase their activities and in South Korea as a way to circumvent Tokyo’s economic sanctions. During Korean President Moon Jae-in’s summit with US President Joseph Biden, Korean companies proposed massive investments in manufacturing plants
May 15th, 2021
Tesla’s road in China becomes bumpier. China’s China Securities Regulatory Commission (CSRC) accepts application from France’s BNP Paribas to set up securities firm in China. China’s foreign direct investment (FDI) in and lending to Africa switch from a focus on energy to minerals which also has implications for the countries that it targets. China’s Ministry of Commerce reports that non-financial outward FDI (OFDI) in the first quarter of 2021 grew 4.6 percent over the same period in 2020, with solid growth in OFDI to Belt and Road Initiative (BRI) countries. Japan’s Line works to improve disclosures and employee data handling practices in the wake of revelations employees at an affiliate in China accessed some of its users’ data. Major investment by Tencent subsidiary in Japan’s Rakuten draws regulatory attention due to concerns about the leak of personal information and technology from the latter to the former. Korea Fair Trade Commission (KFTC) imposes fine on Apple Korea due to Apple Korea actions that disrupted a KFTC investigation of Apple Korea’s abuse of its market dominance. Korean actors move to organize lawsuit against Facebook which has been found by Korean regulators to have violated Korean law by sharing user data without consent. Korea’s Samsung and Hyundai Motor reportedly prepare big proposals for FDI in the US prior to upcoming summit between Korean President Moon and US President Biden. SK Innovation pays $1.8 billion to LG Energy Solutions to settle a dispute between the two firms relating to the former’s theft of electric battery trade secrets from the latter.
April 2nd, 2021
China Ministry of Commerce spokesperson says China’s new foreign investment security review will not impose unnecessary burden on normal foreign businesses. China’s National People’s Congress Standing Committee Chairman says China will press forward on efforts to combat the extraterritorial application of foreign sanctions. China Banking and Insurance Regulatory Commission gives foreign investors the right to acquire a 51+ percent stake in Chinese insurance companies. China’s economic sanctions against members of European Parliament threaten to disrupt the ratification process of the EU-China Comprehensive Agreement on Investment (CAI). Sweden’s H&M faces backlash because of its stance of working with factories in or products from Xinjiang. Chinese executives in state-owned enterprises in Myanmar say turmoil in the country has not affected Belt and Road Initiative projects. Brexit has adversely affected Japanese foreign direct investment (FDI) in the United Kingdom. The head of SBI Holdings says he will move the firm’s brokerage out of Hong Kong due to the evolving political situation. Line takes steps to limit the access of Chinese affiliates and contractors to Japanese data and shift data from Korea to Japan. Japan’s Fast Retailing suffers disruptions due to fires set at two of its Myanmar suppliers in wake of military coup. Korea advances industrial cluster scheme to increase its local production capabilities in the wake of tensions with Japan and Covid-19 related disruptions. In response to complaints, Google Korea will lower in-app purchase commission for smaller app developers. South Korean companies partnering with Chinese internet platform and fintech firms worry that Beijing’s increasing regulation of the latter may adversely affect their joint ventures. The governor of Georgia asks US President Biden to overturn a United States International Trade Commission ruling that threatens a SK Innovation factory in Georgia.
February 2nd, 2021
China receives the largest amount of inward foreign direct investment (FDI) in 2020. China’s 2020 revised catalog of encouraged FDI takes effect increasing the number of encouraged sectors. China issues rules to counteract foreign extraterritorial sanctions affecting its nationals and companies. Renewable energy investments dominate China’s Belt and Road Initiative (BRI) energy infrastructure investments in 2020, though coal remains prominent. India makes ban on dozens of Chinese mobile phone apps permanent due to national security and data privacy concerns. China asks India to clarify its permanent ban against Chinese mobile apps. Japan creates English-language, one stop shop to help foreign financial firms set up operations in Japan. United States (US) sanctions against Huawei and limits on Huawei’s involvement in foreign telecommunications infrastructure projects led Japan’s Sumitomo to turn elsewhere for business. Brexit deal between United Kingdom (UK) and European Union (EU) will keep Nissan producing electric vehicles in the UK. Japan unconvinced Korean President Moon Jae-In’s labeling of a 2018 Supreme Court decision on corporate assets as “undesirable” will solve anything. The head of GM Korea emphasizes labor issues as one of the factors that reduce South Korea’s appeal as a destination for FDI. SK Innovation to invest $895 million into a battery plant in Georgia, a move some feel is about winning a case before the US International Trade Commission. Daewoo Engineering & Construction wins major port facility contracting deal in Iraq. Korea Hydro & Nuclear Power gets contract for major dams in Pakistan.
January 5th, 2021
China’s National Development and Reform Commission (NDRC) and Ministry of Commerce (MOFCOM) release revised 2020 catalog of encouraged industries for foreign direct investment (FDI). China’s NDRC issues rules relating to FDI national security reviews. China’s Standing Committee of National People’s Congress considering amendment to criminal law that would increase prison terms for intellectual property rights (IPR) crimes. Chinese outward FDI (OFDI) in Latin America in 2020 a bright spot versus Chinese OFDI (COFDI) in other regions like Europe. China’s Ministry of Foreign Affairs stresses at news briefing that FDI in Belt and Road Initiative (BRI) and CPEC has not declined with many projects showing good results despite Covid-19. United States (US) Congress to provide billions of dollars to fund removal of ZTE and Huawei equipment from US telecommunication carriers’ systems. Japan not succeeding in attracting foreign financial firms due to tax, red tape, language barriers, and other factors. Japan 5G players gain potential new openings due to global crackdown on Chinese companies such as Huawei and ZTE. United Kingdom (UK) and European Union (EU) post-Brexit deal may not prevent Japanese carmakers from leaving the UK. Japanese group to supply $1.8 billion for coal-fired power plant in Vietnam despite complaints about the environmental impact of the plant. Korea Fair Trade Commission (KFTC) will administer a survey to Google Play Store users to accelerate its review of Google’s plan to increase application transactions to 30 percent. Hyundai Heavy Industries Holdings receives Chinese government approval for its $1.8 billion acquisition of Daewoo Shipbuilding and Marine Engineering. Korea electric vehicle (EV) battery makers move to diversify away from China, turning to other countries and local firms for raw materials and components. LG Group has signed a major investment deal with Indonesia that would facilitate its access to EV battery raw materials and product.
December 3rd, 2020
Foreign direct investment (FDI) into China continues to surge despite Covid-19 and other challenges. China’s Ministry of Commerce says China will take further measures to liberalize ownership restrictions for foreign firms in the service sector. Shanghai shows strength in attracting inward FDI (IFDI) and adds to its regional headquarters and research and development center totals. India moves to ban an additional 43 Chinese phone apps including Aliexpress due to concerns about consumer privacy and national security. China states it will continue to support the construction of the China-Pakistan Economic Corridor (CPEC). Malaysian state government of Melaka terminates $10.5 billion Melaka Gateway project. Nissan moves to sell only electric vehicle (EV) or hybrid cars in China to meet Beijing’s goal of all new vehicles being eco-friendly. The Regional Comprehensive Economic Partnership (RCEP) is expected to have notable impacts on Japanese FDI as well as supply chains given its provisions relating to tariffs, rules of origins, and intellectual property. Brexit may lead the European Union (EU) to slap tariffs and other requirements on EVs which have significant adverse effects on Japanese EV production in the United Kingdom. Tokyo Gas and Marubeni will construct a liquefied natural gas fired power plant in Vietnam. Korea’s Fair Trade Commission reportedly has come to the conclusion that Google abused its market position to prevent modified Android operating systems. The labor union at IKEA Korea strikes for similar wage treatment to workers at IKEA workers elsewhere. Some Korean steelmakers return back home due to government subsidy program. Korean consortium wins engineering, construction, and operations contract for $1 billion bridge project in Bangladesh.
November 3rd, 2020
China’s Ministry of Commerce (MOFCOM) says that inward foreign direct investment (FDI) increased 5.2 percent for the first nine months of 2020 when compared to the same period the prior year. China’s National People’s Congress Standing Committee approves revised export control law. Germany says reciprocity needed if there is to be a European Union-China investment agreement and notes barriers facing European companies in China remain too high. State-owned Assets Supervision and Administration Commission (SASAC) of the State Council points out Central State-owned Enterprises (SOEs) contribution to China and the realization of is 13rd Five-Year Plan. Sweden bans Huawei and ZTE from its core 5G mobile networks. Italy prevents Fastweb, the Italian unit of Swisscom, from using Huawei equipment in its core network. Japan will not participate in US initiative to block Chinese companies from participating in its telecommunications systems. Japan’s NEC Corp. will support United Kingdom government in its effort to develop a next generation 5G wireless network. Consortium led by Japan’s Sumitomo Corp. will develop massive $4.29 billion smart-city project in Hanoi. Mitsubishi Motors will work with Thailand agency to develop system that would allow electric vehicle batteries to power homes. Korean Fair Trade Commission to set up plan to investigate Google for potential abuses of its mobile operating system. Seoul to require Korea Resources Corp. to sell off certain assets to improve its financial condition. Samsung Fire & Marine and Samsung Life face criticisms for support of coal projects and investments through project financing, bonds, and insurance underwriting. Korea’s Doosan Heavy Industries & Construction signs $2.2 billion contract with Vietnam’s VAPCO for massive coal power plant.