MNCs in the News-2017-10-27


Shanghai Customs reported that in the four-year period since the Shanghai Free Trade Zone (SFTZ) came into being about 18,000 firms have been registered. These results mean the four bonded zones merged to create the SFTZ now house more than 27,000 firms. According to government statistics, 13,600 of the 18,000 firms are private and of this total more than 3,200 are wholly foreign-funded businesses, and 940 are Chinese-foreign joint ventures. These companies cover 54 industries and 94 percent of them are in the wholesale or retail sector (“18,000 Firms Registered in Shanghai FTZ since Establishment,” Xinhuanet, October 25, 2017,

According to remarks by the head of the State-Owned Assets Supervision and Administration Commission (SASAC) given at the recent Chinese Communist Party (CCP) 19th Congress, SASAC aims to “build more national champions, actively participate in international competition, and improve corporate governance.” The Head specifically stated “‘state-owned enterprises (SOEs) must serve a leading role,’” though cooperation with private firms was a possibility. Many SOEs have poor investment metrics and subsist on the basis of a monopoly in their home economy (Frank Tang, “Bruised Not Burnt: Chinese State Companies Eye Overseas Markets Once Again,” South China Morning Post, October 21, 2017,


Japan’s Toyota Motor Corp. will reduce its investment in its planned Mexico factory from USD $1 billion to $700 million to align with growing consumer demand for Toyota’s Tacoma pick-up trucks. Though it was speculated the decrease in investment resulted from United States (US) President Donald Trump’s disdain for the Mexican plant and possible fear of higher tariffs, Toyota denies politics had any connection with its investment planning. Despite the lowered investment, Toyota reaffirmed its commitment to the Mexican market (“Toyota scales back at Mexico factory targeted by Trump,” Japan Times, October 25, 2017,

Japan’s Toyota called for more clarity regarding Brexit plans before deciding whether or not to finalize its USD $317 million planned Auris model assembly plant in Britain. Toyota executives said tariff-free access to the European Union’s (EU) market was “absolutely key” for the carmaker that exports 80 to 85 percent of its cars manufactured in Britain to the EU. If Britain cannot finalize a transitional deal with the EU which involves a waved import tax, the Japanese carmaker will consider building its factory elsewhere (“Toyota says Brexit ‘fog’ must clear to safeguard UK plant,” Japan Today, October 25, 2017,'fog'-must-clear-to-safeguard-uk-plant)

South Korea

South Korea’s minister of trade met with his Saudi Arabian counterpart to discuss Korea's planned bid for two nuclear reactors that are part of Saudi Arabia’s Vision 2030 program to diversify the country’s energy supply mix. The bid follows several notable cooperation projects between South Korean and Saudi firms including a USD $5.2 billion engine plant developed by Hyundai Heavy Industries and Saudi Aramco and a joint-venture (JV) between SK Global Chemical and Saudi Basic Industries worth USD $650 million (Kim Eun-jung, “S. Korea expresses intent to bid for Saudi Arabian nuclear project,” Yonhap News Agency, October 26, 2017,

South Korea’s state-owned Korea Development Bank is planning to sell 50.75 percent of its stake in Daewoo Engineering and Construction, South Korea's third largest construction company. The share offering is worth USD $1.7 billion and includes all of Daewoo’s nuclear reactor technology, prompting bids from notable companies like Saudi Aramco, China State Construction Engineering Corp., and Malaysia’s state-owned oil and gas company, Petronas. Because of the strategic importance of the nuclear technology transfer, the South Korean government will approve the final buyer (Park Jae-hyuk, “Who will purchase Daewoo E&C?” Korea Times, October 23, 2017,


French aircraft company Airbus is planning on partnering with Indonesian state-owned aerospace company Dirgantara Indonesia to build a maintenance facility in Indonesia that would better serve Indonesia’s growing logistics and military sectors. Current plans mainly support military type aircraft in line with the Indonesian government’s wishes, but due to growing demand from other Indonesian Airbus clients such as Lion Air, Garuda Indonesia, and Citilink, Airbus is also considering expanding its maintenance facility to handle commercial aircraft (“Airbus Considers Building New Maintenance Facility in Indonesia,” Jakarta Globe, October 25, 2017,

Riau Andalan Pulp and Paper (RAPP), a local subsidiary of Singapore’s Asia Pacific Resources International, is requesting the Indonesian government provide greater clarity regarding its new peatland protection plan. Indonesia’s Environment and Forestry Ministry rejected the company’s latest 10-year business plan due to environmental concerns, causing the company to worry that its new USD $1 billion rayon fiber production facility is in jeopardy. RAPP demands assurances that it can continue business operations before it will invest further in Indonesia (Muhamad Al Azhari, “RAPP Demands Legal Certainty for Indonesian Investment,” Jakarta Globe, October 24, 2017,


Thailand’s state-owned national carrier, Thai Airways International Plc, was granted permission by the government to enter into a joint investment project with French aircraft manufacturer Airbus to develop a maintenance and repair facility at U-Tapao International Airport. Thailand believes the project will further the part of its Eastern Economic Corridor (EEC) development initiative that will focus on logistics to make the region an aviation hub. Airbus believes the area can serving as its aviation base in Southeast Asia (“Thai board wants Airbus joint venture,” Bangkok Post, October 25, 2017,

Thailand’s National Council for Peace and Order approved a set of guidelines for land development in the country’s EEC to improve investor confidence and provide greater clarity on the region’s goals. The EEC focused on ten industries that will be of great importance in the future such as smart cars, advanced electronics, biotechnology, and robotics. In line with this, Thailand’s Education Ministry authorized the first foreign education institute, specializing in electrical, computer, and software engineering programs, to invest in the EEC (Chatrudee Theparat, “NCPO backs EEC land use guidelines,” Bangkok Post, October 25, 2017,


The ASEAN-China Economic and Trade Promotion Association (ACETP) and China’s Chengdu Realty Technology Corp will host a Belt & Road Property Development Forum early 2018. Malaysia’s ACETP president, who signed a memorandum of understanding with Chengdu Realty on improving investment relations between China and Association of Southeast Asian Nations (ASEAN) members, believes Malaysian companies attending the summit will invest at least USD $1.5 billion in China due to the access to financing granted to Belt and Road Initiative participants (Rupa Damodaran, “Belt & Road Property Development Forum 2018 to draw US $1.5b investments,” New Straits Times, October 24, 2017,

Though no new investment deals were confirmed during the Malaysian Prime Minister’s recent visit to the US, several meetings with high profile US investors took place to attract US investment into Malaysia’s electronics and chemical industries. Malaysia’s Prime Minister, in a meeting with the US President, announced Malaysia’s intent to invest USD $3 to $4 billion in US infrastructure development as the two countries work towards strengthening ties and trade relations (Farhan Darwis, “Mustapa: No investment deals struck during PM’s visit to US,” Free Malaysia Today, October 23, 2017,


South Korean companies are shifting investment away from China’s politically difficult market and into Vietnam as a way to diversify risk and take advantage of opportunities in Vietnam. In just the third quarter of 2017, South Korea’s CJ Group spent USD $125 million to be the majority shareholder of two Vietnamese logistics companies and an unnamed South Korean conglomerate assumed control of Gemadept Port in Hoa Sen. South Korea’s Lotte Group is also planning a nearly USD $300 million investment in Hanoi’s retail shops (“South Korean investors heading for Vietnam,” Vietnamnet, October 20, 2017,

Vietnam’s Binh Duong province continues to attract Japanese investment as the local People’s Committee aims to ease business concerns by hosting regular meetings with Japanese investors. At the latest such meeting, Vietnam’s provincial leaders addressed investor concerns ranging from social problems to reducing the time needed to acquire investment certificates and licenses. Major Japanese investments include a Tokyu property initiative with investments totaling USD $1.2 billion, Sun-S Groups USD $450 million investment in Wonderful Saigon Electronics, and Aeon Mall, which has received nearly USD $100 million in Japanese investment (“Japan invests big in Binh Duong,” bizhub, October 26, 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.