MNCs in the News-2018-03-09


At a time when China is facing pressure from the United States (US) and European Union (EU) and slower inward foreign direct investment (FDI) growth, the Vice Head of China’s National Development and Reform Commission (NDRC) proclaimed that “China will sharply widen market access for foreign investors this year with a focus on lowering investment barriers for the service sector and relaxing ownership limits.” Specifically, China might ease ownership limits for joint venture (JV) firms involved in the financial sector (Kevin Yao and Muyu Xu, “China Says Will Sharpen Widely Market Access for Foreign Investors,” Reuters, March 6, 2018,

According to an American Chamber of Commerce in South China survey, American investors in China are all concerned about China’s tax regime, land acquisition policy, and cybersecurity law. However, the cybersecurity law is the issue catalyzing “‘mass concerns’ because it has greatly increased operating costs and has had a big impact on how business is done in China.” More concretely, it has given rise to uncertainties because of a lack of clear procedures/rules and has caused delays in R&D investment (He Huifeng, “Cybersecurity Law Causing ‘Mass Concerns’ among Foreign Firms in China,” South China Morning Post, March 2, 2018,

An EU Parliamentarian stated his body and EU governments may reach agreement on European Commission (EC) proposed legislation on inward FDI this year, driven by rising concerns about IFDI’s national security implications, especially if Chinese IFDI. Legislation would not give the EU final say over deals, but provide for a centralized FDI database, bolster information sharing, require EU governments to develop alternatives in the event the EC and nine other EU governments opposed a FDI deal, and widen the number of sectors deemed sensitive (Jonathn Steams, “Amid China M&A Drive, EU Rushes for Investment-Screening Deal,” Bloomberg, March 4, 2018,

Despite Beijing’s limits on outward FDI (OFDI), China’s Fosun has been engaged in an OFDI spree, recently taking a majority stake in Austrian luxury textile maker Wolford AG for USD $40 million after having invested about $150 million in a French couture house and $52 million in a Brazilian asset manager. One source stated Fosun was buying fashion and luxury goods makers to service Chinese consumers. Fosun recently established a fashion unit to house its clothing and jewelry brands around the globe (Zhang Erchi and Han Wei, “Fosun Continues Shopping Spree to Acquire Austria’s Wolford,” Caixin, March 3, 2018,


Japan’s Nissan Motor Co. is in talks with France’s Renault SA to acquire “the bulk of the French state’s 15 percent Renault stake.” The two carmakers are in discussions with Paris to reduce the government’s stake in Renault, paving the way for Nissan to take more control in the carmakers’ alliance. Barriers still remain to obtaining Paris’ approval and avoiding the appearance of a foreign takeover, but French President Emmanuel Macron stated that the government is ready to exit its Renault holdings (“Nissan in talks to buy France’s Renault stake in merger prelude,” The Japan Times, March 8, 2018,

Echoing Toyota’s commitment to its British operations, Japanese carmakers Nissan and Honda have agreed to build new car models in Great Britain despite Brexit. In the background, British Prime Minister Teresa May is seeking special concessions from the EU for car makers and financial institutions like Nomura, Mizhuho, and Mitsubishi-UFJ to keep them invested in Great Britain. Japanese companies are waiting to see if Britain will exit the EU Customs Union, which may hinder cross-border trade and reduce the benefits of remaining (Duncan Bartlett, “Japan’s Business Leaders Vow to stay in Britain Despite Brexit,” Japan Forward, March 7, 2018,

South Korea

The Korean unit of General Motors (GM) will ask the South Korean government to make its Korean factory sites foreign investment zones as part of efforts to restructure and revitalize its ailing South Korean business. By receiving designation as a foreign investment zone, GM would be able to obtain corporate tax concessions. GM pledges it will invest USD $2.8 billion in its Korean operations and build two new car models in the country if Seoul will step in to help its struggling business (“GM Korea to apply for designation of foreign investment zones,” Yonhap News Agency, March 8, 2018,

China’s Qingdao Doublestar announced its parent corporation reached an agreement with South Korea’s state-run Korea Development Bank for the purchase of a 45 percent stake in South Korea’s Kumho Tire for nearly USD $600 million. The deal states Doublestar must employ current workers for three years and also cannot sell its stake in the tire company for three years. The purchase by Doublestar has spurred union protests at Kumho over the loss of core South Korean technologies, possible layoffs, and a negative local economic impact (Coco Feng, “China’s Doublestar Nabs South Korean Tire-Maker Kumho,” Caixing Global, March 5, 2018,


Indonesia’s Ministry of Energy and Mineral Resources removed an additional 96 regulations and licensing certifications for new investment projects bringing the total number of withdrawn rules to 186. This followed Indonesia’s President Joko Widodo’s instruction that all government ministries cut burdensome regulations to be “investment friendly in order to create jobs and spur economic growth.” In line with this, the Ministry has reduced regulation and made it easier to obtain investment permits in energy sectors including oil, gas, renewables, electricity and mining (PD Djuarno, “simplifying Permits, Energy Ministry Again Revokes 196 Regulations and Recommendations,” Netral News, March 6, 2018,


Britain’s Prudential Assurance Malaysia Berhad, a wholly-owned insurance branch of Prudential PLC, is in advanced talks with Malaysia’s second largest pension fund Kumpulan Wang Persaraan to sell 30 percent of its stake in its Malaysian unit for USD $435 million. New regulations by Malaysia’s central bank are forcing all foreign companies to reduce their stake in domestic insurance providers to 30 percent or less. The new rules are in line with Kuala Lumpur’s goal of increasing domestic participation in the industry (“Prudential Malaysia unit in talks with pension fund KWAP to sell 30 pct stake-sources,” Reuters, March 7, 2018,

Malaysia’s government-linked Telekom Malaysia Bhd signed a memorandum of understanding with China’s Huawei Technologies Bhd to work together on expanding fiber broadband network reach in Malaysia. Both companies decided to work together as part of Kuala Lumpur’s efforts to accelerate Malaysia’s digital economy and advance the digital lifestyle of Malaysians. The two companies will partner together to provide infrastructure and ecosystem support for Malaysia’s digital growth by offering digital services and safeguarding the country’s strategic and critical infrastructure (“TM and Huawei sign MoU to further enhance Malaysia’s broadband reach and digital economy,” The New Straits Times, March 8, 2018,


Vietnam has revoked an investment license from United Kingdom based Technostar Management Ltd and Russia based Telloil Group. The two companies were planning to build a USD $3.2 billion oil refinery in Vietnam’s central province of Phu Yen to produce liquefied petroleum gas, jet fuel, gasoline and diesel. The Vietnamese authorities cancelled the investment license over delays in starting construction for the plant, which should have become operational in 2018, and a failure on behalf of the investors to fulfill investment pledges (“Vietnam revokes $3.2 billion oil refinery project license,” Reuters, March 8, 2018,

A “legal expert” on foreign direct investment in Vietnam said that while foreign investors are interested in developing infrastructure projects such as Vietnam’s North-south highway, legal problems with Vietnam’s central government are giving them pause. Murky legal frameworks and scandals in build-operate-transfer schemes make it hard for potential investors to calculate profits and risks. Vietnam’s Ministry of Transport aims to prevent unfit investors from bidding on projects by requiring they commit capital equaling 20 percent of total investment capital, but this steep requirement drives away capable investors (“North-south highway project fails to lure investors,” Vietnamnet Bridge, March 9, 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.