MNCs in the News-2016-02-26

China’s Ministry of Industry and Information Technology (MIIT) recently published noteworthy “Regulations for the Management of Online Publishing Services” that will ban “foreign companies from publishing online media, games, and other ‘creative’ content within China’s borders. Moreover, foreign-invested joint ventures (JVs) also are banned. Previously, Beijing allowed licensed foreign-invested JVs to “publish original and adapted creative content online.” According to one academic, the point of the regulations was a (domestic) national-security driven desire to prevent foreign forces from influencing on China’s online content and to control online content more generally (“China to Ban Foreign Companies from Online Media Business,” RFA, February 17, 2016,

The Committee on Foreign Investment in the United States (CFIUS) issued its annual report for 2014. The report revealed that of the 147 deals it reviewed in 2014 the most were deals involving Chinese investors (24) with the U.K. running second. “The total for China represents a new high and marks the third year in a row that it topped other countries.” Many of these deals took place in the sensitive areas of computers and electronics. The prospect of a hostile CFIUS decision has led to some failed deals such as Fairchild Semiconductor rejecting a takeover bid by Chinese buyers (David McLaughlin, “China Tops Foreign Buyers Drawing U.S. M&A Security Reviews,” Bloomberg Business, February 20, 2016, Paul Welitzkin, “Chinese Deals Lead List of Acquisitions Reviewed by U.S.,” China Daily, February 24, 2016,

Chinese acquisitions of American tech firms “are setting off ripples of unease in the Obama administration and in Congress.” Sensitivities are reflected in 46 members of Congress submitting a letter to the Treasury demanding a “‘rigorous investigation of investigation’” of a bid by a state-owned Chinese company to buy the Chicago Stock Exchange, which might give Beijing “direct access to America’s financial infrastructure.” Worries about China’s interest in technology has grown in tandem with the increasingly tense situation in the South China Sea. To date, sensitivities have torpedoed deals involving Fairchild Semiconductor and Micron. Still, many deals have gone forward (Keith Bradsher and Paul Mozur, “Political Backlash Grows in Washington to Chinese Takeovers,” The New York Times, February 16, 2016, Jacky Wong, “A China Tech Takeover That Shouldn’t Ruffle U.S. Feathers,” The Wall Street Journal, February 18, 2016, David McLaughlin, “Chinese Bid for Chicago Exchange Draws Congressional Concern,” Bloomberg Business, February 18, 2016,

In December, India agreed to use Japan’s bullet train technologies for a high-speed rail link between Mumbai and Ahmedabad. In the wake of this, it looks like Japanese trading house Sojitz will receive “an additional order to build part of a freight train between Delhi and Mumbai.” The 110 billion yen (almost $1 billion order) order for a 1,500km freight line (to be completed by 2020) would expand upon a 160 billion yen order that Sojitz already received. This project would involve track laying and electrical work such as installing substations. Sojitz would work with local firm Larsen & Toubro (“Sojitz Seen Scoring Another Rail Order in India,” Nikkei Asian Review, February 20, 2016,

Violent protests in Rohtak, about 70 kilometers northwest of New Delhi, by members of the Jat community that wanted better access to education and jobs forced Maruti Suzki India, an Indian unit of Japan’s Suzuki Motor, to suspend production temporarily at both of its car factories (Manesar and Guragaon) in India because the protests interfered with the supply of products. Together, Maruti Suzki’s two plants in India can produce about 5,000 vehicles per day combined (“Violent Protests Halt Car Production for India’s Maruti Suzuki,” Nikkei Asian Review, February 20, 2016,

The Korea Industrial Complex Corporation (KICOX) will provide consulting services for Hoa Khanh Industrial Complex in Da Nang City of Vietnam pursuant to a US $48,000 deal with the World Bank Group. KICOX will utilize its eco-industrial park (EIP) policy experience and models to help Hoa Khanh Industrial Complex develop industrial symbiosis projects. The Korean government supports deals like this because the Korean Ministry of Trade, Industry and energy wants to expand successful Korean EIP models of reducing resource use overseas, especially in developing countries. KICOX President said that the company would further develop EIP projects in other developing countries (Marie Kim, “KICOX to Provide Vietnam with Consulting for Establishing Eco-Industrial Park,” Business Korea, February 23, 2016,

A consortium led by U.S. casino operator Mohegan Sun won a Korean integrated resort project on the island of Yeongjong. According to Korean Ministry of Culture, Sports, and Tourism’s remarks, this new integrated resort will “help boost the nation’s tourism industry,” with a K-pop arena, a theme park and a convention center. The ministry will monitor and support the Mohegan consortium to build this casino resort, which is supposed to be completed within 4 years. The resort will be Mohegan Sun’s first project outside North America. Mohegan officials say that their advantage of winning this bid lies in non-gaming business (Kim Eun-jung, “S.Korea Gives Casino License to Mohegan-KCC Consortium,” Yonhap News Agency, February 26, 2016,

Foreign investors have welcomed Indonesia’s intent to revise its “negative investment list” (DNI) and open new industries to foreign direct investments. Daniel Hui, managing director of China-ASEAN Capital Advisory Co. Ltd., praised the economic package as well as the effort the government is making. He also noted the government should do more to cut more red tape and combat corruption. Euben Paracuelles, executive director of Normura Singapore Ltd., said that people again have been showing interest in Indonesia and that the President’s reforms have “put Indonesia back on the radar screen.” Similar praise also was voiced by the Swedish government (Tassia Sipahutar, “Policy packages on right track, but more needed,” The Jakarta Post, February 26 2016,

Indonesia’s Investment Coordinating Board (BKPM) plans to boost foreign investment from Southeast Asia countries, especially Singapore and Malaysia, which are critical investors. In total, it aims to boost outward and inward foreign direct investment (FDI) to Rp 594.8 trillion. At the same time, the BKPM is dedicated to boosting outward direct investment to other Southeast Asian countries including Cambodia, Laos Vietnam, and Myanmar. According to Franky Sibarani, BKPM chairman, Indonesia ranks 44 of the 50 biggest investors in the world, far below Singapore (12th), Malaysia (18th), and Thailand (24th). Sibarani said that Indonesia’s state-owned companies plan to invest in Myanmar (Tabita Diela, “Singapore, Malaysia are key investment source for Indonesia: BKPM” Jakarta Globe, February 25 2016,

Indonesia’s cold-storage industry welcomes the government’s policy change in opening up more industries to foreign investors. Sector players see this a good sign for attracting increasing FDI to the cold-storage business. According to Indonesia Cold Storage Association (ARPI), most cold-storage components are imported and thus it urges the government to require investors to use more local components and workers. Also, the government needs to attract more manufacturers, perhaps using tax incentives in order to make sure capacity equals production. Government action also is needed to ensure remote areas can attract foreign investors to build adequate cold storage facilities (“Industry welcomes new foreign investment ruling,” The Jakarta Post, February 22, 2016,

Consistent with the Thai government’s national e-payment initiative, the Thai Payment Network Co (TPN) plans to issue 3-5 million debit cards in the first year of its operations. TPN is a joint venture with Bangkok (BBL) holding a 50 percent stake and China’s Union Pay International holding the other half. This initiative aims at creating a new system of electronic payment in Thailand. The TPN debit card will have low merchant fees and will be available for small purchases. In the future, the other three largest Thai commercial banks will also take shares in TPN (Somruedi Banchongduang, “TPN Aims for Mass Debit Card Roll-Out,” Bangkok Post, February 25, 2016,

To encourage Thai companies, especially small and medium-sized enterprises, to invest in overseas market, Thailand’s Board of Investment (BOI) has decided to open branches in Myanmar and Indonesia next year. Traditionally, the role of BOI’s overseas branches is to promote FDI in Thailand. This year, the agency will use its Bt30 million budget to assist Thai companies that want to invest abroad with seminars, courses, and working with authorities in the markets to make the application process smooth for Thai investors. The CLMV plus Indonesia, other ASEAN countries, and other “new” potential markets are the first three targeted investment destinations (Somluck Srimalee, “BOI to Open Branches in Myanmar and Indonesia in Push for Investment Abroad,” The Nation, February 25, 2016,

*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.