MNCs in the News-2013-12-13

With US, European, and Japanese growth anemic after 2008, Japanese companies have concentrated their investments in China. In recent years, though, Japanese firms, especially in consumer electronics, have been shifting a greater amount of investment to India. Large Japanese consumer electronics firms such as Sony, Panasonic, Hitachi, Daikin, and Sharp have invested over Rs 8000 crore (US$1.3 billion) while Korean firms, which traditionally have dominated India’s electronic market, have invested only Rs 4000 crore. Some take this coupled with Emperor Akihito’s recent visit to India as a sign Japan would like to intensify its economic and political partnership with India (Sounak Mitra, “Consumer Electronics Space Hots up as Japan, Korea Slug it Out,” Business Standard, Nov. 30, 2013)

Because of its conflict with China over the Senkaku/Diaoyu Islands, Japan has boosted its economic dealings with neighboring Asian countries. It has concluded a US$23 billion swap arrangement with Indonesia, a US$12 billion swap with the Philippines, a US$3 billion swap with Singapore, and is planning to execute swaps with Malaysia and Thailand. In the background, Japan’s biggest bank by assets, Mitsubishi UFJ Financial Group has completed a US$5.5 billion acquisition of Thailand’s Bank of Ayudhya, the biggest banking takeover in Southeast Asia. In the aggregate, these agreements may strengthen Japan’s diplomatic and economic position among countries in the region (Ben McLannahan, “Japan Extends Swap Deals to Boost Asian business,” Financial Times, Dec. 13, 2013; and Monami Yui and Shigeru Sato, “Mitsubishi UFJ to buy Bank of Ayudya in Biggest Thai bank Takeover,” Bloomberg News, July 3, 2013)

On December 10, the South Korean government confirmed that Daewoo Shipbuilding & Marine Engineering would not be sold to a foreign company. The Korean Times learned during a telephone interview with an official at the Public Fund Oversight Committee that the government views the shipyard as a major defense industry, with vital technologies that needed to be protected. This response came after a Russian consortium offered to purchase a controlling stake in the Korean shipyard after a visit to Seoul for the purpose of signing an agreement with Daewoo for technological cooperation in the renovation of Russian ships in Vladivostok (Choi Yong-ae, “Seoul won’t sell DSME overseas,” The Korea Times, Dec. 11, 2013)

The expansion of global food franchises such as McDonald’s, Burger King, and Starbucks in South Korea might be slowed. Recently, the Korea Convenient Restaurant Association (KCRA), representing small food and beverage outlets, requested the National Commission for Corporate Partnership (NCCP) to restrict fast growing global food franchises which it argues threaten the survival of small Korean local food and beverage stores. While receptive to KCRA concerns, an NCCP official stated that if the KCRA’s appeal is accepted, restriction will be applied not only to foreign major food franchises, but also to local food and beverage chains owned by Korean multinationals (Kim Tae-jong, “Starbucks’ Expansion to be Curbed,” The Korea Times, Dec. 11, 2013).

*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.