MNCs in the News-2018-03-02


In February, Apple began storing Chinese users’ iCloud accounts in its China data center. This catalyzed privacy and human rights concern because it made it easier for Beijing to gain access to user data. Access became easier because the keys for unlocking such data were moved to China from the US, where government access previously required United States (US) court approval. This means that Beijing can use its legal system to request the keys for accessing user data (Stephen Nellis and Cate Cadell, “Apple Moves to store iCloud Keys in China, Raising Human Rights Fears,” Reuters, February 24, 2018,

Xcerra, a US maker of testing equipment for the semiconductor industry, terminated a deal to be acquired by Sino IC Fund, a China state-backed fund focused on bolstering China’s integrated circuit industry. Xcerra said it could not get approval for the deal from the US Committee on Foreign Investment in the United States (CFIUS). Last September, CFIUS blocked China Venture Capital fund’s $1.3 billion purchase of Lattice Semiconductor. Washington has become sensitive about Chinese foreign direct investment (FDI) in the US semiconductor sector (Alice Woodhouse and Ben Bland, “US Regulators Block China Semiconductor Deal,” Financial Times, February 23, 2018,

Chinese automakers are expanding globally through FDI in other firms. Regarding the latter, in late February, Geely took a 9.69 percent stake worth USD $9.2 billion in German auto giant Daimler. The deal, which makes Geely Daimler’s largest shareholder, positions Geely to become a leader in electric vehicles and gives it access to Daimler’s advanced technology. Geely bought Swedish automaker Volvo in 2010 and acquired stakes in Malaysia’s Proton, Britain’s Lotus, and US Terrafugia in 2017. Chinese auto firms confront different laws and regulations when undertaking FDI (“China Focus: Chinese Automakers Bullish in Overseas Foray,” Xinhuanet, February 24, 2018,

Per reports, the Shanghai Guosheng Group, a Shanghai city controlled investment agency, has assumed control over Chinese conglomerate CEFC China Energy Co. A spokesperson for CEFC said, though, all operations remained normal and denied reports Chinese authorities were investigating the firm’s chairman. The action comes in the wake of a crackdown on private firms putatively for taking excessive financial risks and making irrational investments. Last year, CEFC made a high profile $9 billion investment in Rosneft, drawing much attention to it (Dominic Lau and Alfred Cang, “CEFC China Energy Seized by Shanghai Government, SCMP Reports,” Bloomberg, March 2, 2018,


Japan’s Toyota Motor Co. announced that it will build its next generation of Auris model cars in England despite talk of Brexit making conditions unfavorable. Toyota is expecting Brexit negotiators to maintain current trade relations until at least 2020. Toyota’s Europe President has come out to say that “free and frictionless trade” is “vital” for the company’s continued success in Britain. Other carmakers still remain worried that Brexit will impair their long-term profitability and are wary of investing (Costas Pitas, “Toyota to build new Auris car at UK plant in Brexit boost for PM May,” Reuters, February 28, 2018,

Japanese construction company Kubota Corp. announced plans to spend over USD $3.1 billion on three new production plants in the US by 2022. Kubota hopes the investment will offset slowing agricultural sales in Japan by moving some of its operations to the US where there is a growing demand for construction machinery and multipurpose vehicles. The company, which previously relied on exporting products to the US market, also hopes the move will mitigate foreign exchange risks and help it jump market barriers (“Kubota to start engine production in U.S. with three new plants,” The Japan Times, February 28, 2018,

South Korea

Mounting pressure in the US to impose trade restrictions on Korean-made steel, solar panels and household appliances has caused Korean appliance maker Samsung Electronics to consider more US based production facilities. The company has already started feasibility studies for a television plant in response to US President Donald Trump claim that a “mutual reciprocity tax” on Korean televisions is a must. Trump’s threat to withdraw from the North American Free Trade Agreement also jeopardizes Samsung’s Mexican production, which relies on exporting to the US (Michael Herh, “Samsung Electronics Considers Construction of TV Factory in US,” BusinessKorea, February 28, 2018,

South Korea’s Kumho Tire faces pressure to find a new majority shareholder because of opposition to a Chinese company Qingdao Doublestar becoming its largest shareholder. Korea’s Ministry of Trade, Industry, and Energy and its Defense Acquisition Program Administration have to approve the deal because Kumho produces military products. Yet even though defense sales only account for 0.2 percent of total sales, there is strong public opposition to its sale to a Chinese company given China’s recent economic sanctions against South Korean firms (Jung Min-hee, “Sale of Kumho Tire in Hands of Labor Union and DAPA,” BusinessKorea, February 23, 2018,


Showcasing its new electric busses at an international vehicle convention, Indonesia’s PT Mobil Anak Bangsa noted that foreign investors from China, Japan and South Korea have been making investment proposals. They are looking to invest in building electric vehicle battery factories in Indonesia due to the growth potential of electric bus usage. Indonesia plans to domestically produce electric busses to meet its growing transportation needs, but currently lacks the needed energy infrastructure and battery technology (“Foreign Investors Want to Build Battery Factory for Electric Bus,”, March 2, 2018,,uk.html/Foreign-Inves...)

Indonesia’s Bandara Internasional Bali Utara (BIBU) wants to build a USD $2 billion airport in the country’s northern island of Bali to help alleviate the stress tourism is placing on existing airports. The plan is to build the new airport offshore, pending approval from Jakarta’s Ministry of Transportation which will also select the airport’s exact location. BIBU will partner with Canada-based Airports Kinesis for the venture and receive investment from Canadian and Middle Eastern private backers if the project receives government approval (Amal Ganesha, “New $2b Offshore International airport Planned for Northern Bali,” The Jakarta Globe, February 24, 2018,


Russia’s central government proposed a joint innovation fund with Thailand to increase investment in technology. Russia is becoming increasingly interested in the high-technology applications developing along Thailand’s Eastern Economic Corridor with firms like Sberbank, Vnesheconombank, Rostec, and JSC Ilyushin Finance looking to get involved in projects there. To further boost ties, Russia invited Thailand to join the St Petersburg International Economic Forum and will possibly support Bangkok joining the Eurasian Economic Union (Chatrudee Theparat, “Russia floats joint tech fund,” Bangkok Post, February 23, 2018,


According to Malaysia’s Prime Minister Najib Razak, Saudi Arabia’s state-owned oil and gas conglomerate Aramco will invest USD $7 billion into Malaysia before March 31. Kuala Lumpur officials secured the deal during the country’s National Transformation 2050 Youth Canvas presentation ceremony, Malaysia’s initiative to promote growth and job opportunities for future generations. The Prime Minister said this is just one of the government’s many efforts to attract and institute foreign direct investment in Malaysia (“Aramco agrees to invest US $7 billion in Malaysia,” Free Malaysia Today, February 28, 2018,


Vietnamese authorities approved Vietcombank’s sale of a 10 percent stake to foreign investors as Hanoi rolls back restrictions on foreign banking investment. Vietcombank is just one of several state-owned banks seeking to bring in more foreign investment. Currently foreign ownership limits are capped at 30 percent, but in instances of poor performance, like that of Vietnam’s OceanBank and GP Bank, the government will allow 100 percent foreign ownership. Financial institutions from South Korea and Japan are eagerly looking for expansions opportunities in Vietnam (“Vietcombank prepares to sell 10% stake to foreign investors,” Vietnamnet Bridge, Febraury 26, 2018,

*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.