MNCs in the News*
July 29th, 2019
China’s Vice Minister of Industry and Information Technology said the relocation of foreign companies due to the United States (US)-China trade war is “limited and under control.” China opens financial sector to overseas firms while moving to minimize risks confronting the sector. US Senator Joe Manchin raises alarm about 2017 USD $83.7 billion-dollar investment deal in West Virginia. Malaysia and China agree to resume Belt and Road Initiative (BRI) project East Coast Rail Link (ECRL) following an agreement to cut the project’s cost by about one-third. Major Japanese firms sign on to 30% Club, a global initiative aiming to put more women in top leadership positions globally. US National Security Advisor John Bolton says US does not intend to mediate Japan-South Korea forced labor and trade conflict. South Korean distributors of Japanese goods in South Korea suffering from boycott. Trade conflicts around the global are driving South Korean chaebol to invest in the US to escape the problems associated with these disputes.
July 20th, 2019
Reports suggest that following intensifying China-United States (US) trade frictions, a growing number of foreign multinational corporations (MNCs) are considering moving their manufacturing out of China. At a recent China State Council meeting, officials state China aims to provide better intellectual property rights (IPR) protections and that it will treat domestic and foreign firms equally. China courts Japan’s involvement in the Belt and Road Initiative (BRI) purportedly to improve the BRI’s image. Bangladesh works to calm foreign investors in the wake of a violent clash between local and Chinese workers at the Chinese-invested Payra thermal power plant. Japan’s Fair Trade Commission (FTC) moves forward on guidelines to regular IT giants’ use of personal data without consent. Korea preparing plan to “‘to reduce the country’s dependence on Japan’s materials, components and equipment industries.’” Korean firms threatened by possibility that Japan will “remove Korea from its export white list.” Hyundai Motor Co. and Hyundai Motor America have requested the US International Trade Commission to start an investigation against four auto part importers.
July 16th, 2019
Inward foreign direct investment (FDI) flows into China continue to grow, especially in the high-tech sector. Chinese Ministry of Commerce (MOFCOM) official states that Inward FDI (IFDI) is not leaving China en masse and that China will “protect the legitimate rights and interests of foreign investors.” Chinese outward FDI (OFDI) to Europe and North America over the first six months of 2019 shows a noticeable decrease over the same period the prior year. Despite a spying incident and Poland’s President saying he was opposed to Chinese OFDI (COFDI) in strategic infrastructure, Poland’s Foreign Minister told visiting Chinese State Councilor Wang Yi Poland is open to COFDI. Korea reacts strongly to Japanese media report in which a senior member of Japan’s Liberal Democratic party charged dual-use chemicals exported to South Korea ended up in the North. Japan is surprised at Seoul’s strong response to it instituting tighter controls on the export of certain chemicals to South Korea and Seoul making the issue a World Trade Organization (WTO) issue. Japan moving towards a formal WTO case regarding Seoul’s provision of subsidies to South Korean shipbuilders. Hyundai Engineering and Construction signs a $2.7 billion contract with Saudi Aramco for two projects relating to a massive oil and gas refining complex.
July 9th, 2019
Chinese Premier Li Keqiang announces China plans to create a better environment for foreign direct investment (FDI) in China. China’s financial opening leads various foreign investors to move to take control of their China joint ventures (JVs). Chinese outbound mergers and acquisitions (M&A) volume for the first six months of 2019 is the lowest since 2013. During a visit to China, Turkey’s President works to attract Chinese FDI and take advantage of the Belt and Road Initiative (BRI). With the activities of information technology giants gaining increased Japanese government scrutiny, the Japan unit of Facebook joins Keidanren. Japan’s export curbs on semiconductor materials bound for South Korea due to their dispute over forced labor compensation could pressure Samsung and the broader Korean economy. Japanese export controls on high-tech materials and chemicals used in South Korean semiconductor and smartphone manufacturing will stress Korean companies already feeling market and trade pressures. After a gathering between United States (US) President Donald Trump and the heads of major South Korean business groups, some Korean firms stated they would boost their US investments.
July 1st, 2019
President Donald Trump’s tough stance on intellectual property rights (IPR) violations seems to be driving China to treat foreign IPR more respectfully. At the Osaka G20 Summit, Chinese President Xi Jinping announces several measures China will undertake to open its market further to foreign direct investment (FDI) and improve IPR protection. This past week witnessed the creation of the Belt and Road Economic Information Partnership (BREIP). Two major BRI projects in Africa end. At the Osaka G20 summit, participating countries embrace Japan’s international principles for quality infrastructure. Japan tells two leading candidates for the British Prime Ministership it does not want a “no deal Brexit.” As part of its downstream growth and diversification strategy, Saudi Aramco and its affiliates have signed a dozen accords with South Korean companies covering sectors areas like shipbuilding, engine manufacturing, and petrochemicals. A consortium involving Korea Hydro & Nuclear Power (KNHP) and KEPCO Plant Service & Engineering (KPS) signs a five-year maintenance service deal for the Barakah nuclear power plant, but fails to garner responsibilities for maintenance services, nuclear scientists, and engineers.
June 26th, 2019
China Premier Li Keqiang works to lure foreign direct investment (FDI) during the Global CEO Council in Beijing. In 2018, the deal value of European mergers and acquisitions (M&A) activity in China soared by 856 percent to USD $9.94 billion. European Union (EU)-China talks on a Comprehensive Agreement on Investment and China’s negative list show better progress than expected. Brazilian Vice President welcomes Chinese FDI in infrastructure as long as it creates jobs and respects Brazilian rules. Around the time of the G-20, French President Emmanuel Macron will discuss issues about the Renault-Nissan alliance with Japanese Prime Minister Abe Shinzo. Numerous Japanese corporate subsidiaries in the United States have voiced opposition to Donald Trump’s proposal to slap tariffs of 25 percent on another $300 billion of Chinese products. Tokyo has requested Seoul to establish an arbitration panel consisting of representatives selected by other countries to help deal with their wartime forced labor compensation dispute. Seoul prepared to block a deal that would sell Taihan Electric Wire to a Chinese company because it deems Taihan’s high-voltage cable technologies a “‘national core technology.’”
June 18th, 2019
People’s Bank of China willing to back “pilot program based in Shanghai to remove the foreign ownership limit in firms providing securities and fund management services.” According to China Ministry of Commerce report, the growth rate of United States (US) foreign direct investment in China seems to be slowing. Chinese firms have been become increasingly active in hydropower sector overseas. Shanghai’s new technology board seen offering opportunities for Chinese firms encountering limits in dealing with the US or US companies. Tokyo Electron not to supply “Chinese clients blacklisted by Washington.” Japan’s Inpex ready to agree in principle with Indonesia to build a USD $18.4 billion liquefied natural gas plant. Renault Samsung Motors union cancels plans for an all-out strike due to workers going on strike against union management. LG Chem forms 50-50 joint venture with China’s Geely to position itself for new market opportunities after Chinese government electric vehicle battery subsidies cease.
June 10th, 2019
China’s Ministry of Commerce (MOFCOM) reports United States (US) tariffs on Chinese goods have not significantly affected the country’s flows of inward foreign direct investment (FDI). MOFCOM announces China will blacklist “unreliable” foreign businesses which violate market rules, take discriminatory measures hurting Chinese business rights and interests, or threaten China’s national security. China’s plan to build a $1.9 billion light-railway system in Kazakhstan has stalled as China Development Bank cuts off funding due to possible corruption problems. China keeps open non-money-making Vietnam-China Economic and Trade Cooperation Park (VCEP) because of VCEP’s contribution to better image of Chinese FDI. Japanese and other multinational corporations call for more standardized and clearer rules and greater freedom for data transfer and storage. Airbnb experiences revival in Japan after new regulations caused tens of thousands of listers to check-out. Recent arrests of several Samsung Electronics senior executives for an alleged accounting fraud may distract Samsung from taking advantage of the woes of major competitor Huawei. In light of its recent retreat from overseas ventures, Korea National Oil Corp.’s announcement it planned to invest roughly USD $253 million in the UAE in an oil development project has caused controversy.
June 1st, 2019
Foreign direct investment (FDI) and domestic firms, lured by, respectively, China’s consumer stimulus and attractive valuations may mitigate the adverse effects of the US-China trade war on China. The trade war and new regulatory environment is driving Fosun to limit its investments in United States (US) biotech companies and to turn its attention to emerging markets. Namibia amenable to China National Uranium Corporation taking over the world’s longest-running open pit uranium mine provided it respects Namibian employment laws. Japan tightens restrictions on FDI in its high-tech sectors. Japan’s Inpex Corp. strikes USD $20 billion framework deal with Indonesia to develop an onshore liquefied natural gas facility. Large Korean companies remain on the sidelines in the wake of the US’s action to limit the supply of parts to China’s Huawei. To protect their interests in China, Korean firms are courting Chinese party leaders, forming joint ventures, and investing billions of dollars in Chinese high-tech sectors.
May 27th, 2019
China’s Cyberspace Administration releases draft document stating, “operators of the country’s critical information infrastructure…will be required to take into account national security risk when purchasing foreign products and services.” A recent European Union (EU) Chamber of Commerce in China survey suggests the problem of forced technology transfers in China has worsened. The US is considering cutting off the flow of American technology to five other Chinese firms putatively because of these companies’ role in supporting Beijing’s actions in Xinjiang. With the United Arab Emirates (UAE) aiming to become a major China’s Belt and Road Initiative (BRI) partner, China’s East Hope Group conglomerate contemplates $10 billion port investment there. China’s chargé d'affaires in London warns if Huawei banned from Britain’s 5G network there might be “substantial” repercussions for Chinese foreign direct investment (FDI) in the United Kingdom (UK). The Japan unit of US e-commerce giant Amazon has decided to stop direct sales of all Huawei products through its online store. Mizuho Financial Group Inc. said it will tighten standards for lending to coal-fired power plants with high emissions of CO2. Renault Samsung workers in Korea reject draft wage and bargaining agreement which may lead to an “indefinite all-out strike” that drives the joint venture’s upcoming XM3 production to Spain. Iraq’s Ministry of Petroleum awards Korea’s Hyundai Engineering and Construction a $2.45 billion contract to build a seawater supply facility in Iraq.