MNCs in the News-2016-12-09

China’s Ministry of Commerce (MOFCOM) and National Development and Reform Commission (NDRC) have issued rules cutting the number of sectors on its foreign investment catalog restricted and prohibited lists from 93 to 62, resulting in the opening of sectors such as railway equipment, new energy vehicles batteries, and edible fats and oils. Restrictions on the financial sector did not appear to be loosened, though permissible foreign investment stakes may have been increased. Some of items removed from the prohibited list such as gambling really did not represent a change since activities in these sectors are prohibited by domestic law anyways (Michael Martina, “China Pledges to Increase Openness with Foreign Investment Rules,” Reuters, December 7, 2016,

China’s State Administration of Foreign Exchange (SAFE), responding to concerns about China’s stricter regulation of capital outflows, said there were “no restrictions on foreign firms' crossborder profit transfers.” This follows from the fact China has full convertibility on the current account, meaning it does not limit real international payments and transfers such as dividend and goods and services trade. China’s tighter regulation of outward capital flows follows from a weaker Chinese yuan and efforts to “crack down on illegal cross-border capital flows.” A SAFE official rejected the notion there were “substantial pressures from capital outflows, saying the situation remains controllable” (“No Restrictions on Foreign Firms’ Profit Transfers: SAFE,” Xinhua, December 10, 2016,

After almost a two year investigation China’s NDRC has imposed a USD $17.15 million fine on Medtronic, an American medical equipment firm, for price fixing. The fine was the first imposed in the medical device industry. This case, and others such as the nearly USD $1 billion fine against Qualcomm in 2015, are used as examples China uses its anti-monopoly law to target foreign firms. China has rejected the notion, pointing out foreign firms represent less than 10 percent of all anti-monopoly investigations. Yet “the biggest fines have so far targeted Chinese joint ventures or the operations of foreign businesses” (Wendy Wu, “Western Medical Device Maker Fined for Price-Fixing…Is China Really Targeting Foreign Firms?” South China Morning Post, December 9, 2016,

The Technical Committee 260, China’s national cybersecurity standards maker, has released the technical standards for, among other things, operating systems, microprocessors, and office software. Companies like IBM, Intel, and Microsoft have commented in writing that China’s standards may not achieve what China wants them to achieve, may stifle innovation, and may hurt the security level of products, and that what is done for security reviews already is sufficient. Despite the fact the Technical Committee is unbending in its demands and China is pushing for more domestic production, few believe these companies will leave China given the size of the market (Eva Dou, “Microsoft, Intel, IBM Push Back on China Cybersecurity Rules,” The Wall Street Journal, December 1, 2016,

China will strengthen its review of overseas deals exceeding USD $10 billion and “investments of $1 billion or more by any Chinese company in an overseas entity unrelated to the investor’s core business.” The measures reflect China’s worries about capital flight, money laundering, and the “overseas buying binge by Chinese companies.” Responding to concerns, China stressed “it will stick to its…‘going out’ strategies” and “will adhere to outbound investment management policies that allow enterprises to make their own decisions in accordance with the market situation and international practices,” with the “record-filing system remaining the main means of managing outbound investment” (Lingling Wei, “China Issuing ‘Strict Controls’ On Overseas Investment,” The Wall Street Journal, November 26, 2016, Huang Xin,”Economic Watch: China Reiterates Healthy Development of Outbound Investment,” Xinhua, November 28, 2016,; Engen Tham and Elias Glenn, “China Will Stick to ‘Going Out’ Strategy Amid Outflow Concerns,” Reuters, November 28, 2016, Maggie Zhang, “China’s Foreign Investment ‘Shopping Spree’ Over as Beijing Moves to Slash Capital Outflow,” South China Morning Post, November 29, 2016,

China’s State-owned Assets Supervision and Administration Commission (SASAC) announced that China has created an almost USD $22 billion Guotong Fund, which will be supervised by China Reform Holdings Corp. under SASAC supervision and have an initial capital amount of roughly $10.15 billion “to support investments offshore by Chinese companies as well as the country’s so-called new Silk Road Initiative.” The Fund would support investment in manufacturing as well as mergers by Chinese firms. Interestingly, China is creating the fund at a time when Chinese regulators are tightening their supervision of and restrictions on overseas deals (Matthew Miller, “China Starts $21.8 Billion Offshore Fund Amid Currency Concerns,” Reuters, December 7, 2016,

To date, “Chinese dealmakers have completed 170 European acquisitions worth $90 billion.” This represents a 40 percent increase over 2015 when there were 122 deals. Germany attracted the biggest number of acquisitions with 34 deals, most in the hi-tech manufacturing area. The United Kingdom, popular for financial services and leisure sector deals, and France came in second and third. Excluding the ChemChina-Syngenta deal, the average deal size in 2016 was $350 million. Despite Brexit, Chinese investors remain willing to consider investing in the UK because of the cheapness of investment assets there. However they want reassurances good relations will continue (“Chinese Acquisitions in Europe up 40 Percent on Last Year,” China Daily, December 2, 2016,

Softbank owner Masayoshi Son met American president-elect Donald Trump and promised he will invest $50 billion in the United States (US) and create 50,000 new jobs. This investment may link to Sprint Corp, a US telecoms giant 82 percent owned by Softbank Group Co., failed effort this year to merge with T-Mobile due to regulatory obstacles. To fulfill his promise, Son declared he will invest in startup companies in the US. However, considering the fact startup companies employ relatively few people, it might be a struggle for his investment to generate 50,000 jobs. Moreover, Sprint is, of late, cutting jobs (“Son meets Trump, plans $50 billion U.S. investment, 50,000 jobs,” Japan Times, December 7, 2016,

Hyundai Heavy Industries Co. (HHI) announced that it and Saudi Arabia’s state-run oil firm Aramco will start working on a national project to build a shipyard named “the King Salman ship repair and shipbuilding complex.” This USD $4.27 billion project is important because it constitutes part of Saudi Arabia King Salman’s high priority industrial development plan “Vision 2030.” Last year, Hyundai Heavy signed a memorandum of understanding with Saudi Aramco promising to work with it on shipbuilding, offshore plants, and ship engines. After the project is completed, HHI will transfer its shipbuilding technology and expertise in shipyard operations to Aramco (Jung Min-hee, “HHI to Start Work on Giant Shipbuilding Complex Construction Project in Saudi Arabia,” Business Korea, December 2, 2016,’s-project-hhi-start-work-giant-shipbuilding-complex-construction-project)

SeAH Steel Corp., South Korea’s largest steel pipe producer, paid around USD $100 million to purchase, separately, an oil country tubular goods (OCTG) finishing facility and another OCTG manufacturing plant. Both facilities are located in Texas. The acquisitions mean SeAH Steel Corp. will have a manufacturing base in the US in the event that US President-elect Trump follows through on his campaign promise to tighten barriers against foreign investment. The deals, which represent the first time a Korean steel pipe maker has established an OCTG manufacturing base in the US, will enhance the company’s cost competitiveness and product delivery times (Moon Ji-woong, “SeAH Steel acquires two U.S-based steel pipe mills at $ 100 mn,” Pulse News, November 30, 2016,

At a conference by the Indonesian Embassy in Singapore, Indonesian Ambassador to Singapore Ngurah Swajaya highlighted Indonesia’s increasing economic growth and encouraged greater foreign investment in Batam, Bintan, Tanjung Pinang, and Karimun. He argued these four places are promising sites for investment because of rapidly developing infrastructure, tourism development opportunities, manufacturing prospects, and the rapidly expanding fishing ports. Ngurah said, “we hope the increase in foreign investment will not only help our economy grow, but also improve the quality of life of the Indonesian people.” At present, investment from Singapore accounts for the dominant share of foreign investment in Indonesia (“Integrated Campaign to Boost Foreign Investment in Indonesia,” Jakarta Globe, December 05, 2016,

Chinese Ambassador to Indonesia Xie Feng said “China will continue to encourage more investment in Indonesia and help to boost its economic growth.” Compared to the same nine month period last year, China’s realized FDI in Indonesia has grown by 291 percent between January and September. This year, Chinese investors have put significant money into steel and mineral processing and the cement and automotive industries, the latter indicating a commitment to Indonesia’s infrastructure push. However, one analysts observed Chinese investments also may lead to an influx of Chinese workers and products, which could exert a negative effect on domestic employment (Farida Susanty, “China strengthens grip on Indonesia,” The Jakarta Post, November 24, 2016,

According to Indonesian Ambassador to China and Mongolia Soegeng Rahardjo, 130 businesspeople from Zhejiang province in China will head to Jakarta for a three-day visit to investigate whether or not Indonesia offers them a safe operating environment. Currently, many Chinese investors are concerned about risks in Indonesia due to “Defend Islam” rallies in November and December, where many participants displayed clear anti-Chinese Indonesian sentiments. The ambassador said it is not easy to assure Chinese investors, but “the Indonesian government has to show its commitment to minimizing political risks to attract foreign investment, including from China” (“Chinese businesspeople want to know if Indonesia's safe for them: Ambassador,” The Jakarta Post, December 06, 2016,

When Thai Prime Minister General Prayut Chan-o-cha attended the Joint Foreign Chambers of Commerce meeting in late November, foreign companies in Thailand took advantage of the visit to ask the Thai government to modify its laws pertaining to foreign workers, one example being the 2008 Foreign Workers Act. They claimed this act is outdated, time-consuming, and inconvenient. For example, under the current regulation, foreign executives have to apply for work permits even if they are just joining corporate meetings or performing basic corporate roles. They want a more up-to-date system (“Foreign investors urge modification of 2008 act on foreign workers,” Pattaya Mail, November 27, 2016,

During his six-day trip to China, Thai Deputy Prime Minister Somkid Jatusripitak aims to seek more trade and investment opportunities and to stress his country’s strategic partnership with China. Thailand’s Commerce Minister Apiradi Tantraporn pointed out that the Thai government specially hopes to “spur more joint cooperation on several issues in which the two countries share common interests, particularly China's signature ‘One Belt, One Road’ initiative.” It also is expected that the Commerce Minister will renew a five-year Sino-Thai economic development plan, which emphasizes bilateral trade, investment, and economic cooperation (Phusadee Arunmas,“ China visit to underline cooperation,” Bangkok Post, December 8, 2016,

The Malaysian Investment Development Authority (MIDA) said it will cooperate with its Japanese counterparts to promote business-to-business relations between the two countries. Japanese multinational companies in Indonesia are expected to boost their investments as well as make Indonesia the hub for conducting regional and international operations. In the first eight months of 2016, Japanese investors injected RM 1.05 billion in Indonesia, with 86 percent of this investment relating to the expansion and diversification activities of the multinational companies such as Nippon Electric Glass and Cosmo Scientex. Japan has remained Malaysia’s largest source of FDI in the manufacturing sector since 1980 (“Japanese companies continue to reinvest in Malaysia,” Malaysia Mail Online, November 28, 2016,

Malaysian Prime Minister Datuk Najib Razak once again emphasized he will not ever trade national sovereignty to attract foreign investors and urged his quest for foreign investment not be politicized. Najib stated, “I am Prime Minister, I cannot surrender national sovereignty, President Xi Jinping knows and I will defend (national sovereignty).” He explained his efforts to lure the foreign investment aims at putting Malaysia into the ranks of the world’s top 20 economies and argued that some of criticisms against his efforts were a political ploy. Moreover, people should not be taken in by such attacks because they are irrational (“Najib says regrets efforts to woo foreign investor seen as selling country,” Malaysia Mail Online, November 28, 2016, “Najib says won’t pawn national sovereignty to lure foreign investment,” Malay Mail Online, December 3, 2016,

Partly due to multinational companies such as South Korea’s Samsung and LG Display pouring massive amounts of money into Southeast Asian nations, FDI inflows into Vietnam this year have reached a record high, with total FDI running around $15 billion. According to government data, disbursed FDI has risen 17.4 percent comparing to the last year. Speaking to international donors, Prime Minister Nguyen Xuan Phuc said there are three main reasons for increased FDI inflows: the stable macro-economy, controlled inflation. and a balanced economy. He noted that Vietnam will continue to develop its investment environment and accelerate the revision of regulations (Kim Coghill & Eric Meijer, “UPDATE 2-Vietnam's 2016 GDP seen up 6.3 pct, FDI to hit record $15 bln,” Reuters, December 9, 2016,; Nguyen Dieu Tu Uyen, “Vietnam Forecasts Record 2016 $15 Billion Foreign Investment,” Bloomberg, December 9, 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.