MNCs in the News-2015-05-22

Gu Dawei, an official in charge of the outward investment department at the National Development and Reform Commission (NDRC), reported China had created a new investment company, with a capital of $5 billion, to facilitate overseas investment by Chinese companies and the export of “advanced industrial capacity.” This company, which would operate as a subsidiary of the CIC, China’s sovereign wealth fund, would make it easier to move China’s production lines abroad, which would help create jobs and boost exports. Aside from the aforementioned entity, China has established the Silk Road Fund, China-Africa Development Fund, and China-ASEAN Investment Corporation Fund (“China Eyes Investment Fund to Help ‘Capacity Exports’: NDRC,” China Daily, May 21, 2015,

In early May China’s State Council issued a guideline on e-commerce development, pledging to eliminate red tape, facilitate market access, and reduce taxes in an effort to create a more hospitable environment for the expansion of the sector, which it sees as a source of increased growth, jobs, consumption, industrial upgrading, and sectoral development. Following the release of the guideline, Lin Nianxiu, a NDRC deputy director, noted that China would promote China’s e-commerce to the world and would support direct yuan-denominated investment in foreign countries (“E-Commerce from China to Go Abroad,” WantChinaTimes, May 21, 2015,

China plans to invest as much as US $50 billion in Brazil for projects in infrastructure, energy, and car parts. The marquee project would be a railway running from Brazil to Peru that would allow raw materials to be shipped to China without using the Panama Canal. Regarding manufacturing investment, Chinese Premier Li Keqiang said in Brazil that the two countries should “develop a roadmap for industrial investment cooperation” and stressed China supported its firms “sharing experiences and technology with their Brazilian partners.” At the conclusion of his visit, China and Brazil signed a joint action plan addressing investment cooperation (“China to Invest $50bn in Brazil Infrastructure,” BBC News, May 15, 2015,; “Beijing to Launch US $30bn Special Fund for Latin America Projects,”, May 20, 2015, “Li Keqiang Urges Greater Cooperation between China and Brazil,”, May 21, 2015,

According to the Chief Executive Officer (CEO) of Freeport LNG, the US Department of Energy (DOE) “has advised American companies not to allow Chinese companies to invest in US liquefied natural gas projects.” Specifically, Freeport LNG CEO Michael Smith stated, “‘we were advised by the DOE to be careful who our customers were, because this is very political’” and that “‘the DOE said you don’t want a bunch of (US) senators saying our gas is going to China.’” Despite this reported opposition, the DOE has approved several projects that export LNG globally, “including to China” (Rene Pastor, “US Discourages Chinese Investment in LNG Export Industry,” South China Morning Post, May 15, 2015,

China Petroleum Engineering and Construction Company (CPECC), an affiliate of China’s state-owned enterprise China National Petroleum Corporation (CNPC), has struck a contract with government linked Abu Dhabi Company for Onshore Oil Operations (ADCO) pursuant to which it and ADCO will work to boost production at the southern Mender oilfield with CPECC working on inter alia oil gathering stations, pipelines, and sewage systems. CPECC already has worked on the Habshan-Fujairah crude oil pipeline and the Asab oilfield in Abu Dhabi. The crucial Habshan-Fujairah pipeline allows oil to flow through other channels besides the Straits of Hormuz (“China, UAE Oil Firms Sign $330m Worth Oilfield Development Project,” China Daily, May 18, 2015,

Several days ago, Indian Prime Minister Narendra Modi met with Korean business leaders in Seoul to promote his “Made in India” policy, which seeks to enhance India’s core industry sectors and their contribution to India’s GDP. Modi specifically wants to attract foreign investment into 25 key industries in areas like automobiles, electronics, and renewable energy. Hyundai Motor Group, which produces a significant amount of cars in India, expressed an interest in helping India with its “state-sponsored construction projects to build roads and railways.” During his visit, Modi met with representatives of Hyundai Heavy Industries (HHI) to tout joint shipbuilding opportunities (Choi Kyong-ae, “Modi Makes ‘Make in India’ Pitch,” Korea Times, May 19, 2015,

In a brief encounter with Japanese Prime Minister Abe Shinzo on the sidelines of an international conference entitled “Future of Asia” Thai Deputy Prime Minister Pridiyathorn Devakul urged Japanese leaders to encourage more Japanese investment in Thailand’s growing industries such as the medical sector. He also expressed optimism about Japan’s high-speed rail building activities in Thailand as well as Thailand’s developing special economic zones. Abe responded that he “wants to move forward [Japanese] rail and infrastructure development projects” in Thailand (“Pridiyathorn Seeks More Japan Investment,” The Bangkok Post, May 21, 2015,

Indonesia’s Investment Coordinating Board (BKPM) recently held a business forum in Beijing and noted that Chinese investors raised a number of concerns ranging from the difficulties of getting land clearing permits to obtaining environmental impact analysis certificates to negotiating industrial electricity rates. Chinese investors further complained about the lack of clarity in Indonesia tax incentive schemes. The BKPM touted its One-Stop Services, reform of the permit process, and efforts to break administrative bottlenecks. Despite their concerns, the BKPM reported it was able to secure US $16.7 billion in investment commitments from Chinese investors in areas like energy, mining, and infrastructure (“Business Forum Identifies Investment Obstacles in RI,” The Jakarta Post, May 18, 2015, “BKPM Gets $16.7b Investment Commitments from China,” The Jakarta Post,

In March, a high-level Indonesian delegation including the country’s Vice President travelled to Japan where they met with top executives from Japanese multinationals such as Mitsui, Mitsubishi, and Toyota. In the wake of this visit, the President and CEO of Mitsui Indonesia revealed in early May that his company intended to launch a coal gasification project in Indonesia. Coal gasification is an area in which Indonesia cooperates extensively with the Japanese government. Mitsui already is deeply involved in Indonesia, operating businesses such as automobiles, power generation, and petrochemicals. It also has ventures with state-owned fertilizer company Pupuk Indonesia Holding Company (Linda Yulisman, “Japanese Mitsui Eyes Coal Gasification Projects in Indonesia,” The Jakarta Post, May 18, 2015,

Vietnam recently reported that Japan was the country’s second largest investor as of the end of April 2015, pouring US $37.5 billion into more than 2,600 projects. Japan’s investment constituted about 14 percent of the Vietnam’s total FDI. Of note, $31.3 billion of this investment was in the processing and manufacturing sector. Officials with Vietnam’s Ministry of Planning and Investment’s Foreign Investment Agency recognized Vietnam needed to do more to assist Japanese businesses with their operations in the country. Japanese firms found it advantageous to invest in Vietnam to tap the country’s low cost labor pools and its investment incentives (“Japanese Investment in Vietnam Tops $37.5 billion as of April’s End,” Vietnam News, May 21, 2015,

*The information compiled in the MNCs in the News digest is gathered from sources believed to be reliable, but the Wong MNC Center does not guarantee their accuracy. The content of the MNCs in the News digest does not necessarily represent the view of the Wong MNC Center, its Board of Directors, or its Advisory Board, but is intended for the non-commercial use of readers in order to foster debate and discussion and to facilitate and stimulate research.