MNCs in the News-2018-02-02


Drawing upon its 2018 China Business Climate Survey Report, the American Chamber of Commerce in China stated that “American companies overwhelmingly feel less welcome than before…and want the U.S. government to put more pressure on Beijing to level the playing field.” There is a sense dialogue has not worked. Still, companies worry about the risk of a trade war, an issue made more salient by the fact that Beijing has said it will retaliate against any American economic sanctions (Simon Denyer, “U.S. Firms Want Trump Administration to press China for more level playing field,” Washington Post, January 30, 2018,

An American federal jury in Wisconsin recently found Sinovel, a Chinese wind turbine maker, of stealing trade secrets from its former supplier United States (US) company American Superconductor Inc. (AMSC). These secrets allowed Sinovel to make wind turbines and retrofit existing ones so that it no longer needed ASMC products for which it had signed $800 million worth of deals and, consequently, imposed $800 million in losses on ASMC. As a result of the ruling, Sinovel faces hundreds of millions of dollars in potential fines (Nate Raymond, “China’s Sinovel Convicted in U.S. of Trade-Secret Theft,” Reuters, January 25, 2018,

Australia Treasurer recently stated “‘all future applications for the sale of electricity transmission and distribution assets, and some generation assets, will attract ownership restrictions or conditions for foreign buyers.’” Furthermore, agricultural land first has to be marketed for 30 days before being sold to foreigners. He added some of the new policies merely codify policies already applied on a case-by-case basis. Some believe the new policies have to do with increasing anxieties about Chinese investment coupled with concerns about Chinese efforts to influence politics (Jamie Smyth, “Australia to Tighten Foreign Investment Rules Amid China Concerns,” Financial Times, February 2, 2018)


United Arab Emirates’ (UAE) state-owned Abu Dhabi Oil Company (Adnoc) will expand partnerships with Japanese petrochemical companies following a meeting between the UAE Minister of State and CEO of Adnoc, Dr Sultan Al Jaber, and Japan’s Prime Minister Shinzo Abe. Adnoc plans to invest over 40 percent of its capital expenditure account of USD $109 billion to grow business opportunities in downstream businesses as part of a corporate plan to triple petrochemical production by 2025 and invest in advanced technologies (“Adnoc seeks closer ties with Japan amid downstream expansion,” The National, February 2, 2018,

The Chinese government ordered Japan’s Muji Co. to remove a catalog which contained maps incorrectly labeling China’s borders. It opined Muji’s catalog misrepresented ownership of several territories, such as the Diaoyu and South China Sea Islands, belonging to China. China’s Ministry of Foreign Affairs recently reiterated China’s ownership of the islands and expressed dissatisfaction with Japan’s claims of possession. The event follows in the wake of several other incidents involving foreign companies such as Zara, Marriott, and Delta, which China has reprimanded for misidentifying Chinese territories (“Muji’s China subsidiary corrects map with wrong borders,” Global Times, January 30, 2018,

South Korea

South Korean engineering and construction firm POSCO E&C withdrew from a project to build a steel mill in Iran because of political tensions between Saudi Arabia and Iran. As well, POSCO initially planned to invest USD $1.6 billion to build a FINEX technology steel mill in Iran’s free-trade industrial zone with its local partner PKP, but a recent feasibility study indicated the project was unrealizable. POSCO E&C’s hiring of two Saudi directors reportedly influenced the project’s abandonment, too (Jung Min-hee, “POSCO E&C Decides to Withdraw from the Project to Build FINEX Steel Mill in Iran,” BusinessKorea, January 30, 2018,

South Korea’s Samsung Engineering has resolved a conflict with Oman over a USD $1 billion construction deal with Oman’s state-owned Oil Refineries and Petroleum Industries Company, which was never finalized. Following the resolution, Samsung signed a new plant construction agreement with Duqm Refinery & Petrochemical Industries Company, a joint venture (JV) between Oman and Kuwait, for a USD $2 billion oil refinery plant planned to be located in the Duqm Special Economic Zone (Jung Min-hee, “Samsung Engineering and Omani Gov’t Agreed to End Their Dispute,” BusinessKorea, January 29, 2018,


Indonesia’s state-owned oil and gas producer Pertamina awarded a USD $10 billion refinery project to a consortium of Omani and Japanese businesses which include Oman’s Overseas Oil and Gas, and Japan’s Cosmo Energy Holdings’ Singapore-based trading arm. Oman’s government will back the project, though Pertamina will reserve the right to supply 20 percent of the refinery’s crude. The refinery project is one of Pertamina’s six initiatives to help Indonesia address its growing fuel needs (Erwida Maulia, “Japanese-Omani consortium wins $10bn Pertamina oil project,” Nikkei Asian Review, January 30, 2018,

Japan’s Sumitomo Mitsui Financial Group (SMFG) proposes to merge its Indonesian subsidiary with a local Indonesian lender, Bank Tabungan Pensiunan Nasional (BTPN), in which it has a majority stake. SMFG hopes to take advantage of Jakarta’s drive to consolidate its banking sector by merging the two units to exploit the combined units USD $12 billion in assets. BTPN and SMFG are expected to make a proposal to Indonesia’s financial regulator soon (Cindy Silviana and Taiga Uranaka, “Japan’s SMFG Seeks Indonesia Deal That May Pave Way for Higher BTPN Stake,” Jakarta Globe, January 29, 2018,


Royal Dutch Shell is selling control of its Thai Bongkot gas field to Thailand’s state-owned gas producer PTT Exploration and Production for USD $750 million. After a previous attempt by Shell to sell the oil field to Kuwait’s state-owned oil company stalled in Bangkok, it arranged for a new deal with a Thai buyer. The oil field sale comes amid Shell’s debt-reduction plan which will see USD $30 billion in assets being sold off to generate cash for the company (Edward White, “Shell offloads Thai gas field for $750m,” Financial Times, January 31, 2018,

Thailand’s largest state-owned petrochemical company, PTT Global Chemical, is partnering with South Korea’s Daelim Industrial to build a USD $5.7 billion petrochemical plant in Ohio (US). The two companies will create a US based JV to manage the plant which will produce up to 1.5 billion tons of ethylene and ethylene derivatives using US shale gas. Local group JobsOhio is committed to promoting jobs for the Thai-Korean JV and will aid the company’s social development initiatives in Ohio (Yukako Ono, “Thailand’s PTT finds petrochemical partner for US project,” Nikkei Asian Review, February 1, 2018,


China’s Alibaba Group is partnering with the Malaysian Government’s Digital Economy Corporation to set up an artificial intelligence traffic system for Malaysia’s capital in the company’s first such project outside of China. The cost of the project was not revealed, but is deemed “no small amount” by Alibaba’s president. The traffic service was born out of the Alibaba-Kuala Lumpur “e-hub” facility launched last year which aims to promote investment in technology based initiatives and reduce barriers for small firms from developing countries (Liz Lee, “Alibaba to take on Kuala Lumpur’s traffic in first foreign project,” Reuters, January 29, 2018,

Malaysia’s state-owned oil company Petronas acquired six oil and gas blocks for an undisclosed amount from the Mexican government in a recent auction. Mexico’s government believes the auction to be the most significant event for the country’s oil and gas industry since 2014 when foreign firms were allowed to operate in Mexico. Officials estimate Mexico will raise USD $93 billion as winning companies proceed with investments. Petronas will develop two blocks through its subsidiary PC Carigali and work with an alliance of companies to develop the other blocks (“Petronas awarded 6 Mexico-based contracts,” New Straits Times, February 1, 2018,


Foreign investors from India, Thailand, South Korea and the Middle East have all registered to become strategic investors in Vietnam’s Power Generation Corporation 3 (GENCO 3) as the Vietnamese government seeks to offload shares of the company valued at USD $2.3 billion. Hanoi has approved an equitation plan for 36 percent of the Vietnamese company’s charter capital to help Vietnam pay back loans to foreign countries and fund new power projects in the country. Controlling shares in GENCO 3 are also planned to be sold at a later date (“Four foreign investors eye GENCO 3,” Vietnamnet, January 27, 2018,

Vietnam’s largest state-owned oil and gas company PetroVietnam Gas is looking to gain Hanoi’s approval to divest 30 percent of its stock to a strategic investor within the next two years. PetroVietnam wants to increase its use of high-technology practices to create efficiency and improve transparency within the company by increasing the presence of one of its existing investors. Royal Dutch Shell, France’s Total, and Japan’s Tokyo Gas are the three companies Vietnam is currently considering to take the 30 percent stake (“PV Gas seeking strategic foreign partner for 30% divestment by 2020,” Nikkei Asian Review, January 27, 2018,

*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.