MNCs in the News-2016-03-25

China’s General Administration of Quality Supervision, Inspection, and Quarantine announced a recall of more than 6100 BMW Mini Coopers as a result of a fuel pump problem that might result in an engine failure when driving. The recall, which will begin on April 8, relates to cars produced between June 12, 2015 and November 19, 2015. According to the China’s General Administration of Quality Supervision, Inspection, and Quarantine, “BMW China Automotive Trading Co. Ltd. will fix the problem…free of charge” (“BMW to Recall 6,109 Vehicles in China,” China Daily, March 22, 2016,

“The value of M&A deals involving China reached a record high of US $189.7 billion this year to date, a 31.5 percent increase over the same period year-over-year (YOY). A large share consisted of foreign direct investment (FDI) by Chinese companies overseas with the total value of deals reaching USD $97.8 billion, an increase of more than 235 percent. China National Chemical Corp.’s US $46.8 billion purchase of Swiss Syngenta represented a major proportion not only of outward FDI (OFDI), but China’s total M&A. Chinese M&A in Europe and the US hit record highs while inward M&A fell 8 percent (“M&A Boosted by China’s Overseas Deals,”, March 24, 2016,

A study by BrandZ of the top 100 Most Valuable Chinese Brands reports “Chinese brands…continue to earn an increasing proportion of their revenue from overseas.” Lenovo Group Ltd., Huawei Technologies Co. Ltd, and ZTE Corp. earned, respectively, 68, 62, and 50 percent of their revenues overseas. The global head of BrandZ, Milward Brown said this had to do with expanded overseas activities and “a more positive perception of ‘made in China.’” 15 of the top 20 Chinese brands in terms of overseas revenue come mainly from three categories, including six from home appliances, five from airlines and four from technology” (“Chinese Firms Earning More from Overseas on Better Perception of ‘Made in China,” China Daily, March 23, 2016,

Three months after China Railway Group Limited (CREC), a Chinese state-owned enterprises (SOE), won a bid to acquire 60 percent of Bandar Malaysia, a business, commercial, and transport hub that also will function as a terminal for a high-speed railway linking Kuala Lumpur and Singapore, it has announced it would invest $2 billion to build an integrated office complex at Bandar Malaysia housing its Southeast Asian headquarters. CREC president Zhang Zongyan said the project was a sign of CREC’s shift from just being a contractor. Malaysian Prime Minister Najib Razak hailed the investment as another sign of friendly bilateral relations (“China Railway Group Invests $2 bln in Malaysia,”, March 21, 2016,; “China Railway Eyes Regional Market with $2 Billion Investment in Malaysia,” China Daily, March 22, 2016,

Scotland has concluded a Memorandum of Understanding (MOU) with SinoFortone Group and China Railway No. 3 Engineering Group “to bring about infrastructure projects with a potential value of” US $14.3 billion. There are hope that the projects like high-speed rail will help Scotland enhance its “ground commuting systems [which have] long been dominated by automobile” and create jobs through the activities of subsidiary businesses. The Chinese side seems to hope that the MOU “will pave the way for significant investment in fields such as clean energy, transport, and affordable housing” (“Chinese Companies Unveil $14b Scottish Investment,”, March 23, 2016,

Inpex, a Japanese energy company, was going to build a US $15 billion floating LNG plant for a gas field in eastern Indonesia called Abadi situated in the Masela gas block of which it owns a 65 percent share. However, Indonesian President Joko Widodo decided that he would like “the gas liquefaction and purification facility” put on land “to stimulate employment and domestic demand for equipment.” Inpex has not received formal notice of Widodo’s decision and will make plans only after doing so. Any change could complicate Inpex’s plans since the firm had hoped to start producing LNG before 2020 (Sadachika Watanabe, “Inpex’s Plan for Floating LNG Plant Nixed by Indonesia,” Nikkei Asian Review, March 24, 2016,

Last year, it was revealed Volkswagen AG (VW) had tweaked its diesel-engine vehicles to generate false emissions results and as a result the company had to recall thousands of faulty vehicles. South Korea authorities also fined the Germany auto giant 14.1 billion won while thousands of car owners sued the company for refunds and compensation. Recently, South Korean prosecutors launched an investigation of some of VW’s newly launched cars, seizing ten vehicles during a raid of the VW’s Korean unit vehicle inspection center. During the raid, Korean prosecutors confiscated ten vehicles that supposedly have passed Europe’s stronger emission standard tests (“Prosecutors Probing into Volkswagen’s New Cars,” The Korea Herald, March 22, 2016,

Korea’s GS Engineering and Construction (E&C) has secured a US $1.26 billion project from the Land Transport Authority (LTA) of Singapore to build a building-type rolling stock base. This project, known as the T301 project is the LTA’s largest-ever project, the world’s largest rolling stock and bus base and the world’s first involving a building. The project involves building a rolling stock and vehicle base for three subway lines near Changi International Airport in Singapore, with a three story building housing rolling stock and four story building having a bus base. The project is to be accomplished within 95 months (Michael Herh, “GS Wins Project to Build World’s Largest Rolling Stock, Bus Base in Singapore,” Business Korea, March 22, 2016,’s-largest-rolling-stock-bus-base)

A consortium involving Korea’s Daewoo Engineering and Construction and Hanwha Engineering and Construction, and their local partner Saudi Pan Kingdom for Trading, Ind. & Contracting have signed a Memorandum of Understanding with Saudi Arabia to build a 38-square-kilometer new city named “Dahiyar Alfursan” with 100,000 new houses. The housing project, contracted by Saudi Arabia’s Ministry of Housing with funding from the national government, aims to address the country’s serious housing shortages. The project is estimated to cost USD $18-20 billion (Lee Song-hoon, “Daewoo-Hanhwa Consortium to Build 100,000-Household New City in Saudi Arabia,” Business Korea, March 25, 2016,

During last year’s Korea-Russia Fishery Commission meeting, Russia suggested it would grant an additional Pollack quota allocation of 9500 tons to Korea if Korea increased its investment in the Russian Far-East. Subsequently, Korean Ministry of Oceans and Fisheries (MOF) officials, together with representatives from domestic private firms that have a potential interest in investing in fisheries in Vladivostok met with officials of Russia’s Federal Agency for Fisheries to discuss investment conditions and support plans. On March 20, the MOF announced that four Korean private firms are now talking with Russia for investment in the fisheries (“Korean Firms Promote Investment in Fisheries at Russia Far East,” Business Korea, March 21, 2016,

Indonesia’s Vice President Jusuf Kalla said that his country needed to improve the efficiency of its regulatory system to attract more foreign investors into the country. When speaking about his participation in the BOAO Forum for Asia (BFA) in China, Kalla stressed, “‘Business players from all industrial countries, especially China, need a wider market and cheaper production base compared to what they can get in their home countries. They also need big resources. We, Indonesia, have both of them.’” At the BFA, Kalla plans to discuss the potential for strengthening cooperation and looking for more open investments among Asian countries (“More efficient regulatory process needed to ease foreign investment: Kalla” The Jakarta Post, March 24 2016,

Indonesia aims to secure as much as USD $30 billion in investment commitments from China this year, which would represent a 32.5 percent increase YOY. According to some accounts, Indonesia is China’s second largest investment destination. Investment Coordinating Board (BKPM) representatives visited Beijing, Shanghai, and Huzhou over the first three months of this year and secured around $10.8 billion worth of investment commitments. BKPM chief Franky Sibarani believes the establishment of a BKPM China desk will help country secure even greater Chinese investments. The BKPM also is working on revising regulations to improve the ease of doing business in Indonesia (Khoirul Amin, “Govt targets 30 percent increase in Chinese investment,” The Jakarta Post, March 22 2016,

At the first high-level meeting on economic cooperation between Thailand and South Korea, Thai Deputy Prime Minister Somkid Jatusripitak told South Korea’s Deputy Prime Minister his government would like to offer a high-speed-rail project and a Bt20-billion water-management project to Korean firms under government-to-government (G2G) deals. On top of this, the Thai Industrial Estate Authority has found a piece of land to accommodate Korean investment. Somkid noted Korean firms are welcome to bid for other infrastructure projects and observed “our relationship with South Korea has not been as deep, and that makes them invest in other countries such as Vietnam” (Pichaya Changsorn, “Thailand Strives for Better Economic Ties with S Korea,” The Nation, March 23, 2016,

Vietnam’s prime minister has approved a $300-million investment by Samsung Electronics Vietnam for a research and development project in Hanoi. A local unit of the South Korea giant Samsung, Samsung Electronics Vietnam is the single biggest investor in Vietnam. As reported by Vietnam’s government on Wednesday, the project would operate for 50 years on a rent-free basis. Samsung received approval from the government on a $2 billion investment project for another electronics facility last year and its operations include the assembly of smartphones and televisions in the country. In response, other electronics firms have taken moves to expand in Vietnam (“Vietnam PM approves $300 million R&D investment by Samsung Electronics” Reuters, March 23 2016,

*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.