MNCs in the News-2017-07-21


Chinese President Xi Jinping said at the latest Central Leading Group on Finance and Economic Affairs that “the government should create a ‘stable, fair, transparent, and predictable’ environment for foreign businesses.” He also praised foreign firms for facilitating “‘reasonable resource relocation, promoting market-oriented reforms, and playing an important role in China’s economic development,’” adding China “must do more to retain and attract foreign investment.” These remarks come at a time when some foreign investors are looking less favorably on China (Frank Tsang, “Xi Jinping Woos Foreign Firms as Investors Look Beyond China,” South China Morning Post, July 18, 2017,

The China Banking Regulatory Commission (CBRC) ordered Chinese banks to stop financing overseas deals by Dalian Wanda and not to permit the firm to use its overseas assets as collateral for financing. The CBRC also blocked the firm from pouring cash from its onshore businesses into its offshore subsidiaries and from folding overseas units into its locally listed firms. This supposedly was done to “control potential systemic risks.” In recent years, Wanda has been aggressively investing in overseas entertainment, leisure, and sports assets (“China Cracks Down on Dalian Wanda’s Overseas Deals: Sources,” The New York Times, July 17, 2017,

The United States (US)’s Committee on Foreign Investment in the United States (CFIUS) “has objected to at least nine acquisitions of U.S. companies by foreign buyers this year.” This may suggest CFIUS, under US President Donald Trump, is becoming more risk-averse which may obstruct Chinese investment in the US. Still, the number of announced Chinese acquisitions of US firms in 2017 hit a record. There are nearly USD $6 billion of Chinese deals currently under CFIUS review (Gary Roumeliotis and Diane Bartz, “Exclusive: U.S. Toughens Stance on Foreign Deals in Blow to China’s Buying Spree,” Reuters, July 20, 2017,


Japan’s Toyota Motor Corporation is continuing a USD $310 million expansion of its British Burnastion plant following a reassuring letter from the British government about post-Brexit arrangements. The letter has not been disclosed, but reportedly mirrors a letter sent to Nissan, in which Britain committed to boost funding for automotive sector training, research and development, and innovation. Because Nissan, Toyota, and Honda represent nearly half of Britain’s car production, Japan’s Prime Minister Shinzo Abe previously urged the United Kingdom to have a smooth Brexit (“Toyota made U.K. investment decision after Brexit reassurances, sources say,” Japan Times, July 15, 2017,

Japanese financial institutions Sumitomo Mitsui Financial Group Inc., Nomura Holdings Inc., and Daiwa Securities Group Inc., among others, are moving to set up subsidiary businesses in European Union (EU) member states as Brexit potentially jeopardizes their financial services licenses. Though all companies are planning to maintain their British locations as regional headquarters, they want to make sure they have subsidiaries in the EU so they can take advantage of the “single passport system for financial services” that allows operations in all EU member states (“As Brexit approaches, Japanese financial firms cementing footholds in Europe,” Japan Times, July 17, 2017,

South Korea

Hyundai Motor Co. will open its fifth Chinese assembly plant next month in Chongqing with its Chinese joint venture (JV) partner, Beijing Automotive Group Co. The plant will produce compact vehicles for the domestic Chinese market. Compact sales are expected to grow in the second half of 2017 because the Chinese government will increase purchase taxes for small engine vehicles by 2.5 percent next year. Ahead of the plant unveiling, Hyundai’s Vice Chairman met with the Communist Secretary of Chongqing to discuss potential partnerships (“Hyundai to open 5th plant in China next month,” Yonhap News Agency, July 19, 2017,

South Korea’s Nexen Tire Corp. recently signed a memorandum of understanding with state-owned Mubadala Development Co., from the United Arab Emirates (UAE), in a bid to expand its position in the world tire market. Mubadala Development, the world’s 14th largest sovereign wealth fund, is looking to jointly develop automotive technologies with its new Korean partner. Nexen Tire, expecting an equity investment from Mubadala Development, plans to increase production and shipping networks across North America and Europe in a bid to become a leading tire brand (Park Chang-young, “Nexen Tire, Mubadala Development form strategic partnership,” Invest Korea, July 20, 2017,


The Indonesian branch of American oil giant ExxonMobil recently announced it “no longer wishes to continue further discussions or activity” concerning the development of the East Natuna natural gas block, allegedly one of the largest reserves of untapped gas in the world. ExxonMobil informed the Indonesian government that developing the block would be “uneconomical for the company under current terms.” However, Jakarta intends to invite ExxonMobil to discuss the project again, stating it might offer a “special incentive” to make it economically feasible (“ExxonMobil says will drop discussions over Indonesia’s East Natuna gas field,” Jakarta Globe, July 18, 2017,


IQI Group Holdings Chief Economist Shan Saeed stated Malaysia will become a significant economic corridor for the Association of Southeast Asian Nations (ASEAN) and China over the next five years because of foreign investors’ confidence in Malaysia’s economy. Shan stated Prime Minister Datuk Seri Najib Razak’s diplomatic efforts, predominantly with China and Saudi Arabia, had “improved Malaysia’s status in the eyes of the world.” He added besides the country’s “strong economic fundamentals,” its strategic geographical location contributes to its attractiveness as an investment location (“Malaysia Poised to Become Asean, China Economic Corridor: Economist,” New Straits Times, July 19, 2017,

China’s restrictions on bank loans to the Dalian Wanda Group will diminish the prospects for completing the Bandar Malaysia project. Wanda’s, which Malaysia’s Prime Minister Najib Razak recruited in May to help rescue the venture, problems with Chinese regulators led to a rise in the share price of the previous JV partner in the Bandar project, Iskandar Waterfront City Bhd (IWC). IWC’s share price has been under pressure since the deal was terminated earlier this year and the Wanda deal was announced (“More Bad News for Bandar Malaysia,” Free Malaysia Today, July 18, 2017,


Vietnam’s Prime Minister has authorized Decision No. 11/2017/QD-TTg to boost the development of solar power projects in the country. The decision obligates Electricity of Vietnam (EVN) to buy “all electricity produced by grid-connected projects” at 9.35 cent per kWh. Therefore, many solar power investors, including Vietnamese, Korean, Indian, Thai, French and German ones, expressed their interest “to start spending billions of dollars” on Vietnamese projects. However, at present, many projects are “just on paper at the preliminary stage.” Moreover, foreign investors are looking for reliable local partners (“Solar Power Attracting Billions of Dollars Investments,” Vietnam Net, July 18, 2017,

During a recently held conference in Ho Chi Minh City (HCM City) three Laotian provinces, all strategically located along the East-West Economic Corridor, have sought Vietnamese investment in various sectors. Lê Thanh Liêm, deputy chairman of the HCM City People’s Committee, said the city sees Laos as a “strategic and promising market” for investment and trade. So far over 30 enterprises from HCM City have invested over USD $250 million in Laos. The deputy chairman also expressed his wish for effective long-term cooperation with Laos (“Lao Provinces Organize HCMC Investment Conference,” Viet Nam News, July 20, 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.