MNCs in the News*
November 26th, 2018
China working to improve opportunities for foreign players in its insurance sector. Shanghai looks to improve services for foreign companies which have a major presence in the city and are a major contributor to its economic successes. European Union moves forward on inward foreign direct investment (FDI) screening mechanism that is not directed at, but has a lot to do with China. Pursuant to Foreign Investment Risk Review Modernization Act (FIRRMA) the United States (US) Committee on Foreign Investment in the US (CFIUS) will now screen much smaller deals in various sectors newly deemed critical, greatly affecting Chinese deals. Philippines’ President Rodrigo Duterte’s move towards China does not seem to have paid off in terms of increased Chinese outward FDI (OFDI) and infrastructure in the Philippines. US prosecutors investigating Mitsubishi UFJ (MUFJ) for potentially allowing North Korea to launder money. To push forward infrastructure projects, Japanese Prime Minister advisor meets with Filipino officials soon after visit of Chinese President. South Korean manufacturers turn attention from China to Vietnam which offers a better policy, tax, and labor cost environment. South Korea’s POSCO Engineering & Construction Co.-led consortium wins major power plant contract in Malaysia.
November 20th, 2018
China’s Ministry of Commerce (MOFCOM) reported October inward foreign direct investment (FDI) flows reflected a 7.3 percent rise over the previous year. MOFCOM looks to aid Chinese private companies invest overseas albeit in an “orderly,” guided way. German officials are pressing their government to hang up on Chinese corporate participation in the country’s early 2019 5G spectrum auction. American Enterprise Institute report suggests Belt and Road Initiative investment by Chinese companies is losing steam. Tokyo reassures Japanese businesses of its opposition to any actions requiring Japanese companies to pay compensation to forced laborers, saying the matter was settled in 1965. Japan succeeds in getting member countries of the Asia-Pacific Economic Cooperation (APEC) forum to adopt new guidelines relating to the quality of infrastructure development and investment. Korean price rigging conspiracy at US military bases in Korea fuels massive USD $200 million in criminal and civil penalties. South Korean legislatures considers broadened value-added tax on global information and communication technology companies to create a level playing field for Korean firms.
November 14th, 2018
The head of China’s State-owned Assets Supervision and Administration Commission recently announced China welcomes foreign direct investment (FDI) in China’s state-owned enterprises (SOEs). At World Internet Conference, China restates its familiar call for “cyberspace sovereignty,” but most focused on absences of key Chinese political leaders and high-level business representatives. Lego scores another victory in China in its efforts to protect its intellectual property rights (IPR). Australia blocks Hong Kong CK Group’s USD $9.4 billion bid for APA Group gas pipeline operator due to national security concerns. In the wake of Australia’s recent rejection of CK’s acquisition APA group, its foreign minister went to Beijing to reaffirm Australian’s receptivity toward Chinese inward FDI (IFDI). Brexit and United Kingdom (UK) FDI review reforms have raised Chinese anxieties about potentially adverse implications for its FDI in UK leading UK to state it intends to continue welcoming Chinese IFDI. Despite growing criticism over its passivity regarding the Rohingya issue, Japan continues to support Myanmar infrastructure development, fearing isolation will only drive Naypyidaw towards Beijing. Japan bolsters its investment and infrastructure corporation with the Philippines while elevating strategic partnership. Korea has denied Tokyo’s World Trade Organization filing that it breached international trade rules by providing subsidies to Korean shipbuilders.
November 7th, 2018
Shanghai moves to make life easier for foreign direct investment (FDI) as anxieties grow that FDI may leave. Germany’s Federation of Germany Industries’ position paper calls for German businesses in China to limit their dependence on China. Australia’s exclusion of firms with government ties from its new 5G network mean no involvement by Huawei, leading to Chinese government criticisms. Chile signs on to China’s Belt and Road Initiative. During an official meeting between Japanese Prime Minister Abe Shinzo and his Indian counterpart Narendra Modi, Tokyo pledged USD $2.8 billion in new loans for seven projects in India including the construction of a high-speed shinkansen system and roads. Recent South Korea Supreme Court ruling that Japan’s Nippon Steel must pay compensation to Korean World War II forced laborers leaves roughly 70 Japanese firms facing similar cases on edge. Samsung pledges to increase its contribution to Vietnam while Vietnam pledges to keep improving business environment for the firm.
October 30th, 2018
China’s Ministry of Commerce (MOFCOM) says the country will accelerate its efforts to pass a new foreign direct investment (FDI) law that promotes and protects FDI. China’s Supreme People’s Court plans to act to improve the intellectual property rights protection system in China. Following Apple, Amazon and Super Micro call on Bloomberg to retract its story about Super Micro hardware hacked by Chinese intelligence agencies. United States (US) asset sellers and brokers turn away from Chinese buyers because of the delays and uncertainties that arise when Chinese companies are involved in FDI in the US. Multinationals contemplate moving supply chains out of China if the impact of US tariffs on China becomes too severe. Despite his close links with Saudi Arabia, Masayoshi Son cancels his speech at the Future Investment Initiative after Saudi Arabia admits the killing of journalist Jamal Khashoggi. US Committee on Foreign Investment in the United States torpedoes sale of Japanese Italian subsidiary to a Chinese firm on unclear grounds. Fears of the adverse economic impact of the US-China trade war, US rate hikes, and rising oil prices spur Seoul to announce economic package to fuel jobs and investment. Korean builder Dealim Industrial wins major engineering, procurement, and construction ammonia plant deal in Saudi Arabia.
October 22nd, 2018
Google defends its development of a censored search engine for China saying most queries will succeed. Exxon’s foreign direct investment (FDI) in liquid natural gas (LNG) facilities in Papua New Guinea and Mozambique will allow it to sidestep the barriers emanating from Chinese taxes on United States LNG. Consultancy asserts that regardless of the bad news about plummeting Chinese outward FDI the good news is that Chinese OFDI is being more sophisticated and culturally skilled. Tokyo will work to support FDI in heirless businesses to ensure they do not close. Japanese logistics firms look to partner with Chinese ones to avoid political risks, expedite shipments, and profit from subsidies. South Korea’s Ministry of Oceans and Fisheries will carry out a feasibility study about developing Russia’s Slavyanka port. South Korea is enhancing its efforts to support Korean firms in winning project orders from the United Arab Emirates and Vietnam.
October 15th, 2018
China State Administration of Foreign Exchange (SAFE) reports that foreign direct investment (FDI) inflows grew over the first six months of 2018 versus the comparable period last year, though the growth rate was muted. Analysts believe the infiltration of Super Micro Computer server boards will lead to tighter management of supply chains and shifts in their operations and locations. Chinese merger and acquisition (M&A) activity from January to June 2018 shows large percentage drop versus the same period in 2017. At the 10th Mekong-Japan Summit, Japanese Prime Minister Abe Shinzo pledged to promote quality infrastructure projects in Southeast Asian nations along the Mekong River. The Saudi Arabian government is prepared to invest an additional $45 billion in the existing $100 billion Softbank (Japan) Vision Fund. South Korea’s LS Cable & System wins major contract from Bahrain’s Electricity and Water Authority. The Korea Trade-Investment Promotion Agency (KOTRA) and Britain’s International Trade Secretary signed a memorandum of understanding for a strategic partnership in bilateral investments, trade information exchanges, and joint overseas projects.
October 9th, 2018
Regulations promulgated pursuant to China’s 2017 cybersecurity law will give Chinese police expansive authority to examine corporate information systems. China’s Ministry of Commerce (MOFCOM) and other bodies reported that Chinese outward foreign direct investment (FDI) flows experienced a drop in 2017 for the first time since 2002. Apple and Amazon vehemently reject Bloomberg story that their servers were penetrated by hardware corrupted by Chinese intelligence operatives. Plans for Japan’s SoftBank to build the world’s largest solar farm in Saudi Arabia may be burning up, though the firm insists the project is moving forward. Japan’s Mitsubishi partners with various state-owned enterprises (SOEs) on USD $31 billion LNG project in western Canada. South Korea’s Hyundai Development Company (HDC), in a joint venture (JV) with India’s Hindustan Construction Company Ltd (HCC), wins $300 million road project in India. Spurred by South Korea government policies and Indonesia incentives as well as the Association of Southeast Asian Nations (ASEAN) Free Trade Agreement, Hyundai Motor Group plans major car manufacturing plant in Indonesia.
October 1st, 2018
China State Council meeting decides to pursue numerous measures to increase foreign direct investment (FDI) flows as well as the realization of major FDI projects. Rising United States (US)’ tariffs are driving Asian firms to leave or contemplate departing China for other places in the region. Despite pressures, China Ministry of Commerce (MOFCOM) official notes Chinese outward FDI (OFDI) is to be expected and Beijing will encourage firms with ‘good reputation’ and ‘strength’ to invest. Per MOFCOM the profits of Chinese companies overseas hit USD $137.8 billion in 2017, a 52 percent jump year-over-year (YOY). The Japan Overseas Infrastructure Investment Corp. for Transport & Urban Development (JOIN) and the Japan Bank for International Cooperation will invest $300 million in the $16 billion Texas high-speed rail project. Seeing shifting trade patterns due to China’s Belt and Road Initiative (BRI) and the US-China trade war, Japan’s Nippon Express will seek to expand its shipments on Chinese rail companies. South Korea’s Daewoo to cooperate with state-owned Korean enterprises and other firms to bid on massive nuclear power projects in the Czech Republic and Poland. South Korea and Chile look to build up their infrastructure cooperation.
September 25th, 2018
China takes a softer stance on dominating the Artificial Intelligence (AI) sector at the World AI Conference in Shanghai. Summer Davos observers and participants stress the progress of the [China] Greater Bay Area in attracting foreign direct investment (FDI). Alibaba’s Jack Ma retreats from promise to create 1 million jobs in United States (US). Germany looks to pursue more measures, including a billion euro investment fund, to control Chinese FDI flows into the country. Japanese chemical firms boost FDI in Southeast Asia to ramp up production to fill the space flowing from reduced production of Chinese firms that cannot meet China’s environmental requirements. Building upon the foundation created by Japanese and Indian leaders, Japanese companies and investors are pouring money into India to support IT startups. South and North Korea agreed to take steps to reconnect infrastructure links and restart discontinued inter-Korean projects. South Korea’s Hyundai Engineering signed Memoranda of Understanding with Indonesian officials regarding the expansion of its industrial facilities and the construction of a hydroelectric power plant there.