At its recent meeting, China’s Financial Stability and Development Committee stressed, “‘We will take further steps to promote high-quality, two-way financial opening and encourage foreign financial institutions and funds to invest in the domestic financial market to boost the competitiveness and dynamism of the domestic financial system.’” This statement came in the wake of reports the United States (US) was considering restricting the ability of Chinese companies to list their stocks on US exchanges and the ability of government pension funds to purchase the stocks of Chinese companies (“China Vows to Continue Opening Financial Markets,” Bloomberg, September 29, 2019,

China’s limits on capital outflows are serving as a brake on investment into China despite Chinese policy changes, special treatment of and incentives given to foreign firms like Tesla, and China’s efforts to increase foreign direct investment (FDI) and portfolio investment. For analysts, however, this is unlikely especially at a time when China is fearful of capital flight and its currency the renminbi is under pressure. Moreover, economic liberalization has adverse potential political consequences for the regime (Karen Yeung, “China’s One-Sided Capital Account Controls Face Backlash as US Weighs Curbs on Investment,” South China Morning Post, September 30, 2019,

Data indicates venture capital (VC) from China into the US in 2019 may reach its lowest level since 2015. The current 9-month total for 2019 is USD $4 billion whereas it was $7 billion for a similar time frame in 2015. The main reason seems to be “heightened US scrutiny over national security.” Reportedly, in the current environment, Chinese VC’s are shifting to India and Southeast Asia. Chinese FDI into the US also seems to be plummeting (Mercedes Ruehl, James Kynge, and Miles Kruppa, “Chinese Venture Capital Investment in US Falls to Four-Year Low” Financial Times, October 2, 2019,

Iraqi Prime Minister Adel Abdel Mahdi, in Beijing for a state visit in late September, said that his country would sign on to China’s Belt and Road Initiative. Mahdi touted Chinese support for Iraq while Chinese President Xi Jinping stated that “the two countries would collaborate on oil and infrastructure projects.” China is a major Iraqi oil consumer and also a major Iraqi trade partner. In the backdrop, Iraq was going through tumultuous anti-government protests about unemployment and corruption (Tobias Hoonhout, “Iraq Set to Join China’s Belt and Road Project Amid Violent Anti-Government Unrest,” Yahoo! News, October 4, 2019,


Recently, the Japanese government submitted a bill to the Diet (Japanese Parliament) that will lead to the creation of stricter rules for FDI in Japanese companies involved in areas like space development, nuclear energy, and aerospace that have links to national security. Approval thresholds will fall from 10 percent to 1 percent. Furthermore, Tokyo intends to “require foreign stakeholders to give prior notification before making changes in management…and selling core assets.” Government officials pointed out Tokyo will “simplify procedures” for FDI in non-sensitive areas (“Japan to Tighten Foreign Investment Rules for National Security,” The Japan Times, October 3, 2019,

Parliamentary unions in Japan and Korea that deal with bilateral relations have been working to try to facilitate a resolution of Japan-Korea frictions that have affected FDI and other aspects of the two countries’ economic ties such as trade. The Japanese side stresses the need to resolve the wartime forced labor compensation issue before moving forward on other issues, a precondition quite difficult to resolve. As well, it is not clear that such parliamentary unions have much leverage in the current environment (Sakura Murakami, “The Quiet Push to Fix Fractured Japan-South Korea Relations,” The Japan Times, October 3, 2019,

South Korea

Automobile production by foreign firms in Korea is dropping notably and may reach the lows witnessed after the 2008 Great Financial Crisis. Indeed, GM Korea and Renault Samsung have stopped making new cars in Korea. One reason for reduced production relates to labor strife at GM Korea and Renault Samsung which have faced union walkouts and strikes and demands for higher wages. Other reasons include competitive pressures from Korean car firms such as Hyundai and foreign firms’ failure to produce appealing car lineups (Nam Hyun-Woo, “Renault Samsung, GM, SsangYong Hit by Falling Output,” The Korea Times, October 1, 2019,

In late September, Hyundai Motor Group stated that it would set up a joint venture [JV] with Aptiv, an autonomous driving software developer and spinoff of Delphi, previously part of GM’s auto parts business, in the US. The JV reportedly involves a nearly $2 billion investment in Boston in the US and the JV will work on “developing and supplying autonomous driving software.” In a tweet, US President Donald Trump recently touted the investment for the jobs it would create (Jung Min-Hee, “U.S. President Welcomes Hyundai Motor Group’s Investment,” Business Korea, October 2, 2019,

*The information used herein is gathered from sources believed to be reliable, but the Wong MNC Center does not guarantee their accuracy. The content in this section does not necessarily represent the official view of the Wong MNC Center, its Board of Directors, or its Advisory Board.