MNCs in the News-2017-04-21


According to one report, “big global companies, which have long worked to keep from rocking the boat in China, are showing a bit more tolerance for making waves…Businesses are increasingly complaining to friendly lawmakers.” Still, many are cautious for fear of alienating the government. The newfound willingness to complain may have something to do with a reduced enthusiasm for China, a sense China will not make good on its reform promises, and the early hardline stance of President Donald Trump (Sui-Lee Wee, “As Zeal for China Dims, Global Companies Complain More Boldly,” The New York Times, April 19, 2017,

China’s restrictions on capital outflows have make some reluctant to invest in China because they fear restrictions could limit their ability to remit dividends overseas. Since last December, there have been reports by industry associations and in the media that government limits have hindered the ability of firms to move cash overseas or forced them to expend precious time/resources to figure out how to send moneys abroad. The problem is less serious if investors, such as private equity firms, can make investments in China through offshore vehicles (Don Weiland, “China’s Capital Controls Dent Inbound Investment,” Financial Times, April 19, 2017)

Beijing is considering eliminating the long standing requirement that foreign auto companies own no more than 50 percent of auto joint ventures in order to encourage greater efficiency among state-owned enterprises (SOEs) and to “respond to changes in trade policy being pushed by U.S. President Donald Trump.” Most Chinese companies, which have benefitted financially and in terms of access to technology/knowledge, from the policy decry the proposal with the head of the China Passenger Car Association saying “‘automakers that aren’t competent enough would be destroyed” (“China Carmakers May be ‘Destroyed’ If Foreign Venture Cap Lifted,” Bloomberg, April 19, 2017,

Per the Chinese Ministry of Commerce (MOFCOM) Chinese nonfinancial outward foreign direct investment (OFDI) dropped 30.1 percent in March year-over-year (YOY). For the first quarter of 2017, the drop was 48.8 percent YOY. A four month consecutive drop in Chinese OFDI (COFDI) has been attributed to the government’s “tightening restrictions.” These restrictions have focused on large deals, deals in the real estate sector, and investments unrelated to an investor’s “core businesses.” COFDI that occurred took place in sectors like manufacturing, telecommunications, and business services (Fran Wang, “Amid Clampdown, China Companies Continue to Invest Less Abroad,” Caixin, April 18, 2017,

China’s Ministry of Transport reported last week that over the past three years China had concluded “more than 130 bilateral and regional transport agreements with countries in the Belt and Road.” These accords have dealt with “rail, road, sea, and air transportation.” China has “opened 356 international road routes for both passengers and goods, while maritime transportation services now cover all countries along the Belt and Road. The Chinese government is looking for more cooperation in “transport planning and standards…and improved international transport conditions” (“China Signs Up 130 Transport Pacts with Belt and Road Countries,” Xinhuanet, April 20, 2017,


Sharp Corp. is considering “a joint bid” with parent company, Hon Hai Precision Industry Co., to invest in Toshiba’s memory chip business, seeking to mitigate the Japanese government’s national security concerns. At the same time, “state-backed turnaround fund” Innovation Network Corp. of Japan (INCJ) also is “considering investing” in Toshiba’s chip unit. INCJ Chairman Toshiyuki Shiga said that in case the INCJ decides to invest in the firm, partners would be needed. Toshiba is likely to select the winning bidder in July (“Sharp mulls jointly investing in Toshiba chip unit with Hon Hai,” The Japan Times, April 19, 2017,


Korea’s Kia Motors is planning to invest USD $900 billion to build a car manufacturing plant in India. It is anticipated the factory will be located 350 kilometers from the Chennai automobile hub where Kia’s parent company Hyundai Motors has manufacturing operations and thus it will offer synergies with Hyundai and local auto part suppliers. Shifting production to India links to India’s steep import duties on foreign cars and China’s sanctions on Korean firms flowing from Korea’s deployment of US anti-missile defense systems (Jung Min-hee, “Kia Motors to Build Production Base in India by 2019,” BusinessKorea, April 19, 2017,

A Malaysian trade mission to South Korea concluded with Korean corporations committing to numerous investment projects. For example, Korea’s Lotte Chemical will spend USD $450 million to expand its Johor operations. Amorepacific, a cosmetics giant, will invest USD $100 million in a new plant. Coway Co. intends to produce air filters in Malaysia. Each company expects to use Malaysia to access the markets of Association of South East Asian Nations countries and take advantage of Malaysia’s myriad Free Trade Agreements (Dawn Chan, “MITI upbeat, trade mission to South Korea pulls in US$550m investment,” New Straits Times, April 14, 2017,


Malaysia seeks to increase its cooperation with New Zealand in the information technology (IT) and tourism sectors. At the Malaysia-New Zealand joint forum the Malaysian International Trade and Industry minister said New Zealand “had done well in diversifying its economy” and that the country’s tourism and IT sectors “had shown significant growth while offering huge investment opportunities for Malaysia.” Meanwhile, New Zealand’s Trade Minister McClay stated that his country welcomes Malaysian investment in hotel development to deal with the increasing number of tourists (“Malaysia To Expand Collaboration With New Zealand In IT, Tourism Sectors,” Malaysia Digest, April 18, 2017,


Vietnam is developing a public private-partnership (PPP) framework to draw more foreign investment into its infrastructure sector. The move to attract foreign investors is fueled by a desire for outside expertise, specifically from Japan. Vietnam’s Minister of Planning and Investment traveled to Japan to engage officials and business leaders’ involvement in the project and will use their input to craft a PPP framework attractive to investors. Vietnam currently spends nearly 6 percent of its GDP on infrastructure per year, the most of any country in South East Asia (“Vietnam looks to Japan for infrastructure investors,” Vietnamnet, April 17, 2017,

Vietnam’s Hoang Son Trading Investment Joint Stock Company is partnering with Spanish-Japanese joint venture, Univergy Solar, to build a new solar plant in Vietnam’s central province, Thanh Hoa. The plant is expected to have a total value of USD $118 million. The Chairman of Thanh Hoa’s provincial People’s Committee is committed to creating a favorable investing environment for Univergy Solar by having his committee help it navigate through bureaucratic rules and regulations (“Solar power plant nears go-ahead in Thanh Hóa,” Bizhub, April 20, 2017,

*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.