MNCs in the News-2018-02-23


Economic Information Daily reported the head of the State-Owned Assets Supervision and Administration Commission said “State-owned enterprises, large in size but inadequate to meet the standard of world-class enterprises at present [due to their reliance on external support], will be developed into world-class enterprises in the future” Aside from promoting mixed ownership one of the paths to be pursued to enhance their abilities will be to internationalize them by welcoming inward foreign direct investment (FDI) in mixed ownership reform and supporting a deepening of their international operations (Zhu Lingqing, “SOEs’ Internationalization Process Will Be Accelerated,” China Daily, February 13, 2018,

In 2018, Guizhou province, in China’s southwest, seeks to obtain USD $150 billion of realized investment from outside the province. Not only does it have target investment amounts, but the province also has very focused sectoral goals, looking for money in areas like unique agriculture, advanced manufacturing, big data, health, and mountain tourism. While a good portion of this money may come from China, Guizhou also wants money from foreign countries and money from small and medium-sized enterprises in Germany, Japan, and the United States (US) (“China’s Guizhou Targets $150 Bln Investment from Outside,” China Daily, February 13, 2018,

China’s Ministry of Commerce (MOFCOM) reported that total non-financial outward FDI (OFDI) in January 2018 ran USD $11 billion (of which mining was $3.8 billion), a 30 percent increase year-over-year (YOY). OFDI flowed into 955 companies overseas in 99 destinations. A MOFCOM official touted “‘the structure of outbound investment has been optimized,’” observing there was no FDI in entertainment, property, or sports. In terms of sectoral distribution, investment in leasing and business services rose 14.4 percent YOY. Belt and Road FDI in January represented 11.4 percent of the total (“China’s Non-Financial ODI Maintains Double-Digit Growth,” Xinhuanet, February 13, 2018,

China National Development and Reform Commission (NDRC)’s latest guidelines for FDI, which become effective on March 1, include media, weapons development, and cross-border water resources development as areas needing greater Chinese government scrutiny. The guidelines, first promulgated last November, require NDRC approval on OFDI exceeding $300 million and retain limits on OFDI in real estate, hotels, and sports clubs. They apply not just to companies, but individuals, too. The expectation among many is that the guidelines will severely constrain Chinese OFDI in restricted sectors (Matthew Miller, “China Adds Weapons, Media to ‘Sensitive’ Overseas Investment List,” Reuters, February 11, 2018,


Japanese airbag manufacturer Takata Corp and its US affiliate TK Holdings Inc. received US court approval for its bankruptcy exit plan. The court’s approval allows Takata to sell its assets to China’s Key Safety Systems for USD $1.6 billion. Under Key Safety Systems, the airbag company will be reorganized and other automakers will assist Takata in compensating injury claims. Money from the sale will be allocated to pay for court ordered restitution measures helping present and future victims of Takata’s faulty airbags (Tom Hals, “Judge approves Takata’s U.S. bankruptcy plan,” Reuters, February 18, 2018,

US President Donald Trump is contemplating restricting steel and aluminum imports to protect domestic producers from Chinese dumping. Japanese steelmaker JFE Holdings is concerned the protectionist rhetoric could affect adversely its own plans to build a US based plant. More specifically, the trade war that Trump may incite could potentially make the plant unprofitable if other countries follow suit and raise tariffs. JFE may elect to build the plant in Vietnam or India given uncertainty about opening a US plant (Tatsuya Okada, “US steel protections put Japan’s JFE at risk of collateral damage,” Nikkei Asian Review, February 22, 2018,

South Korea

Following an agreement between the governments of South Korea and India to support USD $10 billion in Indian infrastructure construction, Korea Expressway Corporation signed a memorandum of understanding (MoU) with the Maharashtra State Road Development Corporation for highway construction. The MoU will increase technological, human and expertise exchanges between the two companies in preparation for the construction of the USD $7 billion Nagpur-Mumbai Expressway. South Korea’s Ministry of Land, Transport and Maritime Affairs and India’s Maharashtra State will be heavily involved (Jung Min-hee, “Korea Expressway Corporation Concludes MOU on $7B Deal for Indian Highways,” BusinessKorea, February 21, 2018,

After the closure of its Gunsan plant in South Korea, US automaker General Motors (GM) proposed investing USD $2.8 billion in its Korean operations over the next ten years, but highlighted the need for government assistance to maintain its remaining plants. Facing mounting opposition from the local workers’ union and falling sales, GM is petitioning Seoul for a $2.7 billion debt-for-equity swap as well as additional investment to avoid more plant closures and the lay off of additional workers (Shinhyung Lee and Ju-min Park, “GM proposes $2.8 billion, 10-year investment in South Korea: government official,” Reuters, February 21, 2018,


Russian diversified energy holding company Inter Rao is seeking to develop Indonesia’s Bandar Kayangan Global Hub in North Lombok. Inter Rao wants to build an oil refinery, an international port facility, and develop power plants in the area. Another Russian investor, Svetlana, plans to work with Chinese partners to develop a crude oil refinery in the Bandar Kayangan hub. The two Russian companies are in talks with the provincial governments of North Lombok and West Nusa Tenggara to reduce bureaucratic delays and expedite the investments (Supriyantho Khafid, “Russian Investor Prepares Global Hub in North Lombok,”, February 22, 2018,,uk.html/Russian-Inves...)

After Indonesia’s offering of tax incentives and business concessions implemented in 2016 failed to attract more foreign investment, Jakarta is preparing to further revise its investment policies. Indonesia’s Finance Minister cited “regulatory uncertainties” as the cause of Indonesia’s investment woes. Jakarta plans to revisit its tax holiday scheme, expand the industries eligible for tax incentives, and make government dealings more transparent. The Ministry of Finance aims to roll out the new investment revisions by the end of the month (Tabta Diela and Maikel Jefriando, “Indonesia Says It Will Revise Tax Incentives to Lift Investment,” Jakarta Globe, February 21, 2018,


Thailand approached Japanese robotics maker Yaskawa Electric Corporation and other engineering manufacturers to build facilities along its Eastern Economic Corridor (EEC) to boost investment in robotics. Bangkok has targeted robotics in its “4.0 policy” for generating investment in industries with high future demand. Thailand’s Board of Investment approved a waiver of import duties for robotics manufactures, a 50 percent reduction in corporate tax for robotics production and agreed to further tax deductions for research and development spending in robotics fields (Chatrudee Theparat, “Japanese firm hails Thai embrace of robotics,” Bangkok Post, February 19, 2018,

Philippines’ based water and wastewater services provider Manila Water Company is acquiring an 18.72 percent stake in Thailand’s Eastern Water Resources Development and Management Public Company Limited to further its internationalization strategy in Southeast Asia. Manila Water plans to use its stake in Eastern Water to enter Thailand’s EEC, which is Bangkok’s signature economic stimulus initiative. Manila Water’s foray into the Thai market follows similar investments in a diverse range of industries in Malaysia, Indonesia, and Vietnam (Cliff Venzon, Philippines’ Ayala finds toehold in Thailand with water deal,” Nikkei Asian Review, February 19, 2018,


Thailand’s Superblock Pcl plans to invest USD $1.76 billion to build wind farms in Vietnam capable of generating 700 megawatts of green energy. The Thai company’s investment is coterminous with Hanoi’s policies to reduce pollution and transition to using more renewable energy sources in meeting its growing energy demands. Superblock will receive financing assistance from a China’s state-owned construction company to build the wind facilities on land leased for 49 years (“Largest Thai solar firm plans to invest USD$1.76 billion in Vietnam’s wind power project,” Vietnamnet, February 21, 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.