MNCs in the News-2017-08-11


Visa, an American debit and credit card company, said in early August that it had applied for a license from the People’s Bank of China to operate in China. MasterCard, a competitor to Visa, also said it was going to apply for a license. China agreed to open its card market in 2015, but took two years to issue updated guidelines for foreign card companies wanting to operate in China. Beyond this, it remains unclear how long authorities will take to grant relevant licenses (Wang Yanfei, “Foreign Cards on Horizon, May Woo Chinese Users,” China Daily, August 8, 2017,

Western companies are finding it increasingly difficult to do business with prospective Chinese investors, both private and state-owned enterprises (SOEs), in an environment where the government/Chinese Communist Party can, at any time, change rules of the game that are known to only a few. Moves against private firms (and previous high fliers) like Dalian Wanda, Fosun, and HNA Group coupled with the fact SOEs Board members and executives do not operate independently make it “hard for Western companies to reach a level of comfort with Chinese counterparts” (James Kynge, “Beijing’s Chicanery Leaves Western Business Guessing,” Financial Times, August 7, 2017)


Japanese carmaker Nissan will sell its battery subsidiary, Automotive Energy Supply Corp., and related manufacturing facilities to China’s private equity firm GSR Capital for nearly USD $1 billion. Recent policy changes by the Chinese government have required electric vehicle (EV) producers to purchase batteries from domestic vendors only, making Nissan’s battery business unviable in China. Nissan sold its battery business to GSR under the understanding that GSR will supply Nissan with cheap EV batteries, taking advantage of government subsidies (“Nissan to sell battery unit to Chinese private equity firm in $1 billion deal,” The Japan Times, August 9, 2017,

Japanese carmakers Toyota and Mazda announced a USD $1.6 billion partnership to establish a United States (US) based, electric vehicle (EV) production plant that is estimated to create 4,000 jobs. Concerns over America’s prioritization of domestic investment may have been a deciding factor behind the new US plant as Toyota already had plans to produce cars at its Mexican plant. Both firms also see the partnership as a way to boost their position given competition from Amazon, Google, and Apple (Tom Krisher and Yuri Kageyama, “Toyota, Mazda plan EV partnership, $1.6 billion U.S. plant,” Japan Today, August 4, 2017,

South Korea

South Korea’s SK Engineering & Construction Co. announced a USD $1.6 billion refinery upgrade deal with Parsian Oil & Gas’ subsidiary, Tabriz Oil Refining Co. Since Iran signed a nuclear deal that removed international sanctions on investment and trading, the government has been looking to lure in more foreign companies to boost its oil sector. The renovation of the Tabriz oil refinery is an example of an effort to use FDI to boost the country’s economy and increase production of Iran’s key export good (“SK E&C signs deal to modernize Iranian oil plant,” Yonhap News Agency, August 8, 2017,

South Korea’s Daewoo Engineering & Construction and Samsung Engineering have recently won contract packages on constructing oil refinery facilities ordered by a joint venture (JV) between state-owned Oman Oil Company and Kuwait Petroleum International. The deals, with a total value of USD $2.75 billion and USD $2 billion respectively, will help solidify the Korean companies’ market position in Gulf Cooperation Council countries. Oman needs the upgraded facilities to process oil more efficiently and remain competitive during the downturn in world gas demand (Jhoo Dong-chan, “Daewoo E&C, Samsung Engineering clinch mega deals in Oman,” The Korea Times, August 9, 2017,


Indonesia’s nickel producer, Vale Indonesia, is losing smelting partners, and is having difficulties securing replacements, following the Indonesian government’s cancellation of its 2014 ban on unprocessed ore exports. To date, Vale Indonesia has lost a handful of smelting partners, such as its Chinese partner for its ferronickel smelting plant in Behodopi, and is experiencing delays with their Japanese partner, Sumitomo Metal Mining, on a USD $2 billion nickel processing plant due to the 2014 legislation (Cindy Silvania, Wilda Asmarini, and Bernadette Munthe, “Vale Indonesia Struggles to Find Nickel Smelter Partners After Rule Change: CEO,” Jakarta Globe, August, 9, 2017,

Indonesia’s President, Joko Widodo, is pursuing a “two-pronged strategy” over China’s South China Sea ambitions. Indonesia depends on Chinese investment, which accounted for over USD $1.6 billion in 2016, to upgrade the country’s infrastructure. However, the President also sees the need to enhance Indonesia’s military over possible confrontations in the South China Sea to protect “Indonesian economic interests and sovereignty.” The President hopes China’s One Belt One Road will bring investment without dispute, but is increasing Indonesia’s military presence in the region (Oliver Ward, “Indonesia’s Two-Pronged China Strategy: Walking the South China Sea Tightrope,” ASEAN Today, August 8, 2017,


Thailand’s Export-Import Bank (EXIM Thailand) plans to open new branches in Cambodia and Laos later this year. The move is part of its strategy to expand in the Greater Mekong Sub-region “to support Thai enterprises abroad.” Such support is needed as there are investment and trade opportunities in emerging markets that Thai entrepreneurs “may not be so familiar” with, including in Cambodia, Laos, Myanmar and Vietnam. With this effort EXIM Thailand seeks to drive forward the country’s “international trade and investment strategies” (“'EXIM Thailand eyes Cambodia market,” August 11, 2017, Intellasia East Asia News,


China and Malaysia recently launched a USD $13 billion rail project connecting peninsular Malaysia's East and West. The railway will “significantly cut travel time” and is a key part of China’s Belt and Road initiative infrastructure ambition. For Beijing, the railway project is “another expansion of its soft power” in Malaysia, which also “lays claim to” several disputed islands in the South China Sea, and is essential to advancing China’s geopolitical and strategic interests (“Hard-pedaling Soft Power, China Helps Launch $13B Belt and Road Rail Project in Malaysia,” Thailand News. Net, August 10, 2017,


In a recent meeting with Vietnam’s Prime Minister, the CEO of Mitsubishi, a Japanese carmaker, announced plans to build an electric car factory in Vietnam. Mitsubishi’s CEO cited Vietnam’s attractive investment policies, Association of South East Asian Nations (ASEAN) membership, and recent legislation on environmental protection. Vietnam’s Prime Minister confirmed that there would be “favorable conditions” for the auto manufacturer in line with the country’s automotive development strategy which Vietnam has been pursuing to lure in advanced technology and production facilities (“Mitsubishi to establish electric cars factory in VN,” Vietnam News, August 9, 2017,

Long Son Petrochemical Co Ltd, a joint venture between Vietnam’s state-owned PetroVietnam and Thailand’s Siam Cement Group, announced South Korea’s Hyundai Engineering and Construction (HEC) successfully won a building contract for its Long Son Petrochemical Complex. HEC will build a water supply and treatment facility in Vietnam’s Ba Ria-Vung Tau province as stipulated by the USD $320 million contract. The facility, once complete, will represent a USD $5.4 billion investment and be the largest petrochemical plant in Vietnam (“HEC wins Long Son Petrochemical Complex contract, bizhub, August 9, 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.