MNCs in the News-2017-02-17


The American business community has become much more amenable to the concept of “reciprocity,” that is, demanding it gets the same access and benefits in China that Chinese firms get in the United States (US). Indeed, “some industry leaders [are] saying they would welcome a tougher approach from the Trump administration.” Among other things, they note how difficult it is to enter the financial sector in China, how they are subject to requirements (e.g., for joint venture/JV and technology transfer) that Chinese companies do not have, and that China does not follow through on its World Trade Organization (WTO) obligations (Michael Martina and Matthew Miller, “US Business in China Warms to Possible Trump Trade Policy Shake-Up,” Reuters, February 15, 2017,

Hejun Vanguard Group, which has been involved in anti-trust battles against Coca-Cola and Apple, has filed a complaint relating to McDonald’s sale of its China and Hong Kong assets to CITIC Ltd. (which will control 52 percent of McDonald’s China business after the sale) and Carlyle Group LP. It argues the sale “may hurt workers and consumers.” It has filed complaints with China’s Ministry of Commerce (MOFOM) requesting scrutiny of “the transaction” and “measures to prevent McDonald’s abusing what it claims is the company’s dominant position.” It also has requested investigations of “alleged violations of China’s franchise law by McDonalds” (Michelle Price and Julie Zhu, “Chinese Firm Files Complaints with Chinese Government over McDonald’s China Sale,” Reuters, February 16, 2017,

Rising Chinese takeovers have led to rising concerns in Germany, France, and Italy, among others. They have written to the European Union (EU) asking for greater rights to “‘intervene in direct investments which are state-controlled.’” They want greater powers to investigate and block deals. Germany already had been pushing for new rules giving its concerns about the sectors where Chinese firms were investing, the lack of reciprocity, and the role of state-owned enterprises (SOEs). It argues foreign companies “‘must show that their investments…are not driven by the state, and that financing for their deals is in keeping with the market’” (Guy Chazan, “EU Capitals Seek Stronger Right of Veto on Chinese Takeovers,” Financial Times, February 14, 2017)

The US Federal Trade Commission has asked Syngenta for more information regarding its proposed acquisition by ChemChina, a Chinese SOE. Syngenta said it did not expect “the extension to cause a delay.” Elsewhere, the EU’s review of the massive USD $43 billion deal, which is looking at various divestments of Syngenta’s businesses in Europe, has been delayed by 10 working days. The deal, which represents a large part of Chinese outward foreign direct investment (FDI) in 2016, has been subject to repeated delays, but has been signed off by the US Committee on Foreign Investment in the United States (CFIUS) (Don Weinland and Lucy Hornby, “US Calls for More Information on $43bn ChemChina Deal,” Financial Times, February 14, 2017)

Dalian Wanda, a leading Chinese property developer, reportedly has been eyeing Germany’s Postbank, which its owner Deutsche Bank is eager to sell, and other financial institutions in Europe. It represents yet another component of the company’s efforts to diversify from its core real estate business in China. However, many are surprised at Dalian’s interest given that it has no experience in banking and the fact Chinese regulators have said that they are going to limit investment by Chinese firms in areas that do not fit into existing lines of business. Others looking at European financial assets include Fosun and Anbang (Don Weiland and Caroline Binham, “China’s Wanda Circles Postbank in Search of European Bank Assets,” Financial Times, February 13, 2017)


South Korea’s transport ministry has lodged a complaint against Nissan Motor’s South Korean unit, alleging that the Japanese car manufacturer manipulated the fuel economy test results of its Infiniti Q50 sedan. A transport ministry official said it is investigating BMW and Porsche for similar reasons. Investigations into imported cars, whose popularity augmented over the past few years, have increased in South Korea since the Volkswagen emission manipulation scandal, and the government recently announced a ban on the sale of 10 models of various manufacturers, including Nissan, BMW and Porsche, because of fabricated documents on emissions and noise-level tests (Hyunjoo Jin, “South Korea files complaint against Nissan on mileage claims, probes two others,” Reuters, February 14, 2017,

Toshiba Corp. (Japan) announced it plans to pull out of construction work on the United Kingdom’s (UK) new Moorside nuclear plant, raising doubts about the project’s future. Toshiba, which was developing the project together with France’s Engie, announced to investors that “Toshiba will consider participating in the (Moorside) project without taking on any risk from carrying out actual construction work.” The UK badly needs investment in order to replace its aging coal and nuclear plants that will have to close in the 2020s. However, this has proven to be difficult, given the high costs involved in such infrastructure investment projects (“U.K. nuclear project in doubt after Toshiba writedown,” The Asahi Shimbun, February 15, 2017,


South Korea’s state-run Korea Electric Power Corp. (KEPCO) recently started the construction of its wind power plant in Jordan, making it the company’s first wind farm in the Middle East. KEPCO won the contract from state-run National Electric Power Company through its wholly owned entity Fujeij Wind Power Company. Construction costs are estimated around $184 million and construction should be finished by October 2018. Under the current contract, KEPCO will operate the wind farm until 2038, with revenues expected to be around $570 million. By 2018 it will run three power plants, making it responsible for 24 percent of Jordan’s annual power supplies (Kim Jung-hwan, “KEPCO to add wind power plant in Jordan next year,” Pulse News, February 14, 2017,

Korea’s Ministry of Strategy and Finance announced the country’s outward foreign direct investment (OFDI) in 2016 hit USD $49.24 billion, an increase of 18.7 percent year-over-year. Korean OFDI (KOFDI) to the US jumped last year to USD $18 billion, an increase of 66.9 percent. An official stated: “It is too early to say that the results are attributable to US President Donald Trump’s hardball policies to promote investments in the US as such investments were made before his inauguration.” KOFDI in the Cayman Islands and Vietnam increased 29.9 percent and 2.5 percent, respectively, while KOFDI to China decreased 8.8 percent (Jung Suk-yee, “Korea’s Direct Overseas Investment Hits Record High of $49.2B Last Year,” Business Korea, February 16, 2017,’s-direct-overseas-investment-hits-record-high-492b-last)


To facilitate its transformation into a manufacturer of high-end products, the Indonesian government has banned the export of mineral ores since 2014. Last month, however, it moved to loosen its policy, allowing certain materials to enter the global metal markets. The main reason for this revision is that many mining companies did not meet the deadline to build smelters and this led to an oversupply of raw materials. This policy change will bring funds for mining companies that are building plants, but hurt refined nickel producers at the same time. Moreover, individual companies like Freeport will see some policy gains (Yoga Rusmana & Eko Listiyorini “Indonesia’s Export Ban Flip-Flop Sows Confusion: Quick Take Q&A,” Bloomberg, February 13, 2017,

Foreign investors are keeping a close eye on the Indonesian regional election that was held earlier this month. The Jakarta Gubernatorial Election was of particular importance, as the outcome was expected to influence sentiments in financial markets and investments in the real sector. An economist at Bank Permata stated that, “many foreign investors are postponing their investment plans; waiting for the election result.” These investors are worried about the potential mass protests and instability. Therefore, they choose to wait until the election results come out (Ghoida Rahmah,“ Foreign Investments on Hold Until Election Over,”, February 14, 2017,


“Thailand seeks Indian investments for future growth,” Domain-B, February 15, 2017,

Chatrudee Theparat, “Prayut hungry for foreign funds. Premier asks for more Huawei know-how,” Bangkok Post, February 16, 2017,


Yukako Ono & Hiroshi Kotani “Japan and China battle for rail projects in Southeast Asia,” Nikkei Asian Review, February 16, 2017,

Jonathan Mantle,“The Proton Saga: Why Would Malaysia Sell Its Symbol of Dignity to China,” South China Morning Post, February 12 2017,


“PM pledges favourable environment for foreign investors,” Vietnam Net, February 17, 2017,

“Vietnam sees strong FDI flows from APEC partners,” Vietnam Net, February 17, 2017,

*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.